Purpose: Diabetes mellitus has been associated with increased dry eye disease (DED) and exacerbates DED's pathology. This preliminary short-term study aimed to evaluate the effects of 3% Diquafosol Sodium ophthalmic solution (DQS) on ocular surface inflammation and corneal nerve density in diabetic dry eye (DDE) patients. Methods: In this perspective, participants used 1 drop of 3% DQS (Diquas; Santen Pharmaceutical Co., Ltd., Osaka, Japan) 6 times daily for 8 weeks. Non-invasive tear breakup time (NITBUT), tear film lipid layer (TFLL), conjunctival hyperemia [redness score (RS)], corneoconjunctival staining (CFS), corneal sensitivity (CS), Meibomian gland quality (MGQ) and Meibomian gland expressibility (MGEx), corneal nerve fiber density (CNFD), and Standard Patient Evaluation Eye Dryness (SPEED) questionnaire were assessed at baseline, at weeks 4, and up to 8 weeks. Matrix metalloproteinase-9 (MMP-9) of tear samples was measured at baseline and weeks 8. Results: The mean age was 61.27 ± 11.68 years. At baseline NITBUT = 5.89 ± 2.81 s, tear meniscus height = 0.17 ± 0.05 mm, TFLL = 2.74 ± 0.51, CFS = 4.35 ± 0.68, CS = 53.83 ± 9.63 mm, MMP-9 = 49.10 ± 10.42 ng/mL, RS = 1.65 ± 0.44, MGEx = 1.85 ± 0.72, MGQ = 2.65 ± 0.50, CNFD = 20.36 ± 8.20 no./mm2, and SPEED = 12.62 ± 3.91. At week 4, significant improvements were found in all parameters except RS (1.59 ± 0.46, P = 0.172) and CNFD (21.46 ± 8.41, P = 0.163). Finally, at week 8, all parameters had significant improvements. Conclusion: Preliminary short-term findings suggest that treatment of DDE patients with DQS was found to be safe and efficacious in improving dry eye parameters. In addition, inflammatory marker and corneal nerve density were significantly improved. This study was registered with ClinicalTrials.gov (NCT05193331).