OBJECTIVE: To study longitudinal relationships between type 2 diabetes mellitus (T2DM), cortical thickness, and cognitive function in older people with normal cognition, mild cognitive impairment, and Alzheimer disease (AD). METHODS: The sample was derived from the Alzheimer's Disease Neuroimaging Initiative cohort who underwent brain MRI and cognitive tests annually for 5 years. Presence of T2DM was based on fasting blood glucose ≥7.0mml/L or the use of glucose-lowering agents. We used latent growth curve modeling to explore longitudinal relationships between T2DM, cortical thickness, and cognitive function, adjusting for relevant covariates and testing for interactions. RESULTS: There were 124 people with T2DM (mean age 75.5 years, SD 6.2) and 693 without T2DM (mean age 75.1 years, SD 6.9) with at least 1 MRI available. AD and lower cortical thickness at study entry was associated with a lower chance of having a MRI available at each follow-up phase (all p < 0.001). T2DM was associated with lower baseline cortical thickness (p = 0.01). We found no direct effect of T2DM on decline in cortical thickness or cognitive function, but there was an indirect pathway linking T2DM and cognitive decline via baseline cortical thickness (β = -0.17, p = 0.022). There was an interaction between T2DM and education whereby the negative effect of T2DM on baseline cortical thickness was reduced in those with greater education (β = 0.34, p = 0.037). These associations changed minimally when adjusted for baseline cognitive diagnosis. CONCLUSIONS: In an older cohort with low cerebrovascular disease burden, T2DM contributes to cognitive decline via neurodegeneration. Prior brain and cognitive reserve may protect against this effect.