Foot ulceration remains a serious health concern for diabetic patients and has a major impact on the cost of diabetes treatment. Early detection and preventive care, such as offloading or improved hygiene, can greatly reduce the risk of further complications. We aim to assess the use of hyperspectral tissue oximetry in predicting the risk of diabetic foot ulcer formation. Tissue oximetry measurements are performed during several visits with hyperspectral imaging of the feet in type 1 and 2 diabetes mellitus subjects that are at risk for foot ulceration. The data are retrospectively analyzed at 21 sites that ulcerated during the course of our study and an ulceration prediction index is developed. Then, an image processing algorithm based on this index is implemented. This algorithm is able to predict tissue at risk of ulceration with a sensitivity and specificity of 95 and 80%, respectively, for images taken, on average, 58 days before tissue damage is apparent to the naked eye. Receiver operating characteristic analysis is also performed to give a range of sensitivity/specificity values resulting in a Q-value of 89%.