ABSTRACT Background: Diabetic peripheral neuropathy is a leading microvascular complication causing significant morbidity, yet data in Northwest Ethiopia remains limited. Timely identification is essential to prevent ulcers and amputations. Objective: The aim of this study is to assess the prevalence of peripheral neuropathy and associated factors among adults with Type 2 diabetes at referral clinic in Tibebe Ghion Comprehensive Specialized Hospital, Northwest Ethiopia 2025. Methods: A hospital-based cross-sectional study was conducted at Tibebe Ghion Comprehensive Specialized Hospital diabetes follow up clinic on 403 type2 diabetic patients. Data were collected by using pretested structured questioner and checked and exported to SPSS version 27 for analysis. Both bivariate and multivariate binary logistic regressions were employed to identify factors associated with diabetic peripheral neuropathy. A variable having a p value of < 0.25 in the bivariate model was subjected to multivariate analysis to avoid confounding variable’s effect. Adjusted odds ratios were calculated at 95% confidence interval and considered significant with a p value of ≤ 0.05. Results:This study finding showed that the prevalence of DPN was 28.5% (95% CI: 24.1% –33%) among study participants.According to the multivariate logistic, Drinking of alcohol now or in the past(AOR =4.33; (95% CI: 1.71, 11.00), no formal education (AOR =10.98; (95% CI: 1.66, 72.62), attending up to primary education (AOR =24.80; 95% CI:3.25, 189.32), physical inactivity (AOR =2.02; 95% CI: 1.14, 3.55), Good foot self care practice (AOR =0.36; 95% CI:0.17, 0.77), the presence of HTN (AOR=4.63; 95% CI: 2.14, 9.99), Dyslipidemia (AOR =2:79; 95% CI: 1.01, 7.66), Diabetic retinopathy (AOR=8.04; 95% CI: 1.53, 52.83), Diabetes Kidney disease (AOR=8.98; 95% CI: 2.09, 30.91) and participants on only insulin therapy(AOR=3.66; 95% CI: 1.32, 10.11) were independent predictors of diabetic peripheral neuropathy among study participants. Conclusion: Lower educational level, the presence of comorbidities and other microvascular complications were strongly associated with it. Targeted early screening and intensive management of comorbidities, alongside promoting foot self-care, alcohol cession and physical activity, are crucial to reducing the burden of diabetic peripheral neuropathy.