Diabetes causes skin complications, including xerosis and foot ulcers. Ulcers complicated by infections exacerbate skin conditions, and in severe cases, limb/toe amputations are required to prevent the development of sepsis. Here, we hypothesize that hyperglycemia induces skin barrier dysfunction with alterations of epidermal integrity. The effects of hyperglycemia on the epidermis were examined in streptozotocin-induced diabetic mice with/without insulin therapy. The results showed that dye leakages were prominent, and transepidermal water loss after tape stripping was exacerbated in diabetic mice. These data indicate that hyperglycemia impaired skin barrier functions. Additionally, the distribution of the protein associated with the tight junction structure, tight junction protein-1 (ZO-1), was characterized by diffuse and significantly wider expression in the diabetic mice compared to that in the control mice. In turn, epidermal cell number was significantly reduced and basal cells were irregularly aligned with ultrastructural alterations in diabetic mice. In contrast, the number of corneocytes, namely, denucleated and terminally differentiated keratinocytes significantly increased, while their sensitivity to mechanical stress was enhanced in the diabetic mice. We found that cell proliferation was significantly decreased, while apoptotic cells were comparable in the skin of diabetic mice, compared to those in the control mice. In the epidermis, Keratin 5 and keratin 14 expressions were reduced, while keratin 10 and loricrin were ectopically induced in diabetic mice. These data suggest that hyperglycemia altered keratinocyte proliferation/differentiation. Finally, these phenotypes observed in diabetic mice were mitigated by insulin treatment. Reduction in basal cell number and perturbation of the proliferation/differentiation process could be the underlying mechanisms for impaired skin barrier functions in diabetic mice.