The present review integrates findings of published studies that have evaluated the cognitive function of treated and untreated type 2 diabetic patients and provides a detailed overview of the neuropsychological assessments conducted. Cognitive deficits are observed in older people with glucose intolerance or untreated diabetes but these deficits appear to be attenuated by treatments that improve glycemic control. Cognitive decrements in treated type 2 diabetic patients are most consistently observed on measures of verbal memory (35% of the measures) and processing speed (45% of the measures) while preserved function is observed on measures of visuospatial, attention, semantic and language function. Some studies suggest that deficits in cognitive functions are associated with poorer glycemic control. A number of other factors, such as depression, cardiovascular and cerebrovascular disease, increase these deficits. We conclude that, in diabetic patients who achieve and maintain good glycemic control, type 2 diabetes only has a small impact on cognitive functions before the age of 70 years. However, early onset of type 2 diabetes, poor glycemic control and the presence of micro- and macrovascular disease may interact to produce early cognitive deficits. In older adults (70 years and over), diabetes likely interacts with other dementing processes such as vascular disease and Alzheimer's disease to hasten cognitive decline.