Persistent neuropathic pain due to peripheral nerve degeneration in diabetes is a stressful symptom; however, the underlying neural substrates remain elusive. This study attempted to explore neuroanatomical substrates of thermal hyperalgesia and burning pain in a diabetic cohort due to pathologically proven cutaneous nerve degeneration (the painful group). By applying noxious 44°C heat stimuli to the right foot to provoke neuropathic pain symptoms, brain activation patterns were compared with those of healthy control subjects and patients with a similar degree of cutaneous nerve degeneration but without pain (the painless group). Psychophysical results showed enhanced affective pain ratings in the painful group. After eliminating the influence of different pain intensity ratings on cerebral responses, the painful group displayed augmented responses in the limbic and striatal structures, including the perigenual anterior cingulate cortex (ACC), superior frontal gyrus, medial thalamus, anterior insular cortex, lentiform nucleus (LN), and premotor area. Among these regions, blood oxygen level-dependent (BOLD) signals in the ACC and LN were correlated with pain ratings to thermal stimulations in the painful group. Furthermore, activation maps of a simple regression analysis as well as a region of interest analysis revealed that responses in these limbic and striatal circuits paralleled the duration of neuropathic pain. However, in the painless group, BOLD signals in the primary somatosensory cortex and ACC were reduced. These results suggest that enhanced limbic and striatal activations underlie maladaptive responses after cutaneous nerve degeneration, which contributed to the development and maintenance of burning pain and thermal hyperalgesia in diabetes.