OBJECTIVE: To determine the influence of type 2 diabetes mellitus on the risk of dementia and AD. BACKGROUND: Both dementia and diabetes are frequent disorders in elderly people. METHODS: Prospective population-based cohort study among 6,370 elderly subjects. At baseline study participants were examined for presence of diabetes mellitus. Nondemented participants were followed up, on average, for 2.1 years. Incident dementia was diagnosed using a three-step screening and comprehensive diagnostic workup. To complete the follow-up, medical files were studied of persons who could not be reexamined. We estimated relative risks with proportional hazard regression, adjusting for age, sex, and possible confounders. RESULTS: During the follow-up, 126 patients became demented, of whom 89 had AD. Diabetes mellitus almost doubled the risk of dementia (relative risk [RR] 1.9 [1.3 to 2.8]) and AD (RR 1.9 [1.2 to 3.1]). Patients treated with insulin were at highest risk of dementia (RR 4.3 [1.7 to 10.5]). CONCLUSION: The diabetes attributable risk for dementia of 8.8% suggests that diabetes may have contributed to the clinical syndrome in a substantial proportion of all dementia patients.