Predicting and being aware of the side effects of the damage in one limb on the performance of other limbs is very important in the prevention of progressive damages. Finite element (FE) and musculoskeletal modeling can be helpful in this way. Hence, the aim of this study is to investigate the side effects of the hammer toe deformity on the lower extremity, especially on the plantar fascia functions. To compare the joint reactions of the hammer toe and healthy foot (HF), two musculoskeletal models (MSM) of the healthy and the hammer toe foot (HTF) subject were developed based on gait analysis. A previously validated 3D finite element model was constructed using Magnetic Resonance Imaging (MRI) of the diabetic participant with the hammer toe deformity processed at five different events during the stance phase of gait. It was found that the hammer toe deformity makes dorsiflexion of the toes, and the windlass mechanism is less effective during walking. Specifically, the FE analysis results showed that plantar fascia (PF) in HTF compared to HF played a less dominant role in load bearing with both medial and lateral parts loaded. Also, the results indicated that the stored elastic energy in PF was less in HTF than the HF, which can indicate a metabolic cost during walking. Internal stress distribution shows that the majority of ground reaction forces are transmitted through the lateral metatarsals in hammer toe foot, and the probability of fifth metatarsal fracture and also progressive deformity like tailor's bunion was subsequently increased. The MSM results showed that the joint reaction forces and moments in hammer toe foot have deviated from normal function, with the metatarsophalangeal joint showing that the reactions in hammer toe are less than the healthy foot. This can indicate a viscous cycle of foot deformity, increased internal stresses, change in muscle forces and joint kinetics and plantar fascia tensile forces from normal, which can lead to increase the risk of ulceration in the diabetic foot.