The deleterious effects of diabetes mellitus on the retinal, renal, cardiovascular, and peripheral nervous systems are widely acknowledged. Less attention has been given to the effect of diabetes on cognitive function. Both type 1 and type 2 diabetes mellitus have been associated with reduced performance on numerous domains of cognitive function. The exact pathophysiology of cognitive dysfunction in diabetes is not completely understood, but it is likely that hyperglycemia, vascular disease, hypoglycemia, and insulin resistance play significant roles. Modalities to study the effect of diabetes on the brain have evolved over the years, including neurocognitive testing, evoked response potentials, and magnetic resonance imaging. Although much insightful research has examined cognitive dysfunction in patients with diabetes, more needs to be understood about the mechanisms and natural history of this complication in order to develop strategies for prevention and treatment.