Abstract Aims/Introduction Diabetic peripheral neuropathy is a common diabetes‐related microvascular complication. The relationship between peripheral nerve function and glucose variability is unclear. We investigated the association of glucose variability with subclinical diabetic polyneuropathy in a large‐scale sample of patients with type 2 diabetes. Materials and Methods We enrolled 509 individuals with type 2 diabetes who were screened for diabetic peripheral neuropathy and monitored using a continuous glucose monitoring system. Multiple glycemic variability parameters, including the mean amplitude of glycemic excursions, glucose standard deviation (SDgluc) and glucose coefficient of variation were calculated from 3‐day glucose profiles obtained from continuous glucose monitoring. All participants underwent nerve conduction studies, and the composite Z‐scores for nerve conduction parameters were calculated. Results Multivariate logistic regression analyses showed that SDgluc and the conventional risk factor hemoglobin A1c (HbA1c) were independently associated with abnormal nerve function, and the corresponding odds ratios (95% confidence interval) were 1.198 (1.027–1.397, SDgluc) and 1.182 (1.061–1.316, HbA1c), respectively. The composite Z‐score of nerve conduction velocity and response amplitude obviously decreased with greater SDgluc, and the composite Z‐score of distal latency significantly increased with increasing tertiles of SDgluc (all P trend