Backgrounds: The aim of the research was to investigate the factors contributing to cognitive dysfunction in type 2 diabetic patients, to distinguish the complex relationship between diabetic retinopathy (DR) and different cognitive status. Methods: Two hundred and ninety-seven type 2 diabetes mellitus (T2DM) patients were enrolled in our study. We adopted the Clinical Dementia Rating (CDR), Mini-mental State Examination (MMSE) and Montreal Cognitive Assessment (MOCA) to evaluate the cognitive function. Firstly, cognition status was classified into dementia and non-dementia according to MMSE and CDR. Patients with non-dementia were further classified into mild cognitive impairment (MCI) and normal cognition status based on MOCA. The factors contributing to cognitive dysfunction were analyzed. Results: Among the 297 T2DM subjects, 47 were enrolled in the dementia group and 174 in the MCI group according to a battery of cognitive function tests, presenting a prevalence of 15.8% and 58.6% respectively. After adjustment for age, sex, and education level, waist circumference and DR were risk factors for dementia (OR: 1.057, P=0.011; OR: 2.197, P=0.040). Low-density lipoprotein cholesterol (LDL-C) was a risk factor for MCI (OR: 1.635, P=0.047), while age at T2DM onset and moderate drinking were protective factors for MCI (OR: 0.936, P=0.044; OR: 0.289, P=0.004). Conclusions: MCI is common in T2DM patients. Waist circumference and DR are risk factors of dementia, LDL-C is a risk factor for MCI, and moderate drinking and age at T2DM onset are protective factors for MCI. DR is unrelated to MCI in T2DM.