Previous studies have suggested that prolidase and nitric oxide (NO) regulate many processes, such as collagen synthesis and matrix remodeling. Oxidative stress plays an important role in the development of microvascular complications in diabetic patients. Data on serum prolidase activity in patients with diabetes mellitus or diabetic neuropathy (DN) are limited and conflicting. The aim of this study was to measure serum prolidase activity, NO, total antioxidant status (TAS), and malondialdehyde (MDA) levels in patients with DN. Forty-five patients with DN and 40 healthy controls were enrolled. Serum prolidase activity, TAS, MDA, and NO levels were determined. Serum MDA and NO levels were significantly higher in DN patients than controls (p = 0.002, p = 0.001, respectively), while prolidase activity and TAS levels were lower (p = 0.003, p = 0.001, respectively). Prolidase activity was negatively correlated with NO and MDA (r = -0.911, p < 0.001; r = -0.905, p < 0.001, respectively), while positively correlated with TAS (r = 0.981, p < 0.001) in DN patients. The current study is the first showing the decreased serum prolidase enzyme activity. Our results suggest that decreased collagen turnover may occur in DN patients, who have increased oxidative stress and increased NO levels. Decreased prolidase activity seems to be associated with increased NO levels and oxidative stress along with decreased antioxidant levels in DN. Therefore, decreased prolidase activity may play a role in pathogenesis of DN. Prospective clinical studies are necessary to confirm these findings.