The current study was conducted to investigate the cognitive function in Japanese elderly with type 2 diabetes mellitus (DM). Participants included 69 diabetic and 27 nondiabetic subjects (60 to 85 years old). The cognitive functional tests conducted were the Mini-Mental State Examination (MMSE), Word Lists Recall (immediate, delayed), Digit Symbol Test (Wechsler Adult Intelligence Scale-Revised [WAIS-R]), and the Stroop Color Word Test. Hemoglobin A1c (HbA1c) was measured as the index of glycemic control, and information about recent hypoglycemic episodes was gathered by using questionnaires. Student's t test showed that DM subjects had significantly lower scores in the MMSE (P<.01) and Digit Symbol Test (P<.05) than non-DM subjects. The scores of the Digit Symbol Test in diabetes subjects had a significant negative relationship with HbA1c (r=-.433; P<.001), and insulin-use had a significant relationship with the scores of the MMSE and Digit Symbol Test. Subjects in the DM group were further divided by insulin use. Comparison of insulin-treated DM subjects, non-insulin-treated DM subjects, and nondiabetic subjects by analysis of variance followed by Bonferroni's post hoc test showed that insulin-treated DM subjects had significantly lower scores in the MMSE and Digit Symbol Tests than both non-insulin-treated DM subjects (P<.05) and nondiabetic subjects (P<.01). Our study suggests that Japanese elderly DM subjects, especially those with insulin treatment, have poor cognitive function.