Objective To investigate the correlation of polymorphism in cystatin C gene (CST3) with mild cognitive impairment (MCI) in the elderly with type 2 diabetes mellitus (T2DM) and to analyze the risk factors for MCI. Methods A total of 156 retired veteran cadres with identified T2DM living in Shanghai were recruited and divided into 2 groups: MCI group and normal cognition (NC) group based on Diagnostic and Statistical Manual of Mental Disorders-Fourth Edition (DSM-Ⅳ). All subjects were evaluated with cognition scores of Mini-Mental State Examination (MMSE), Montreal Cognitive Assessment (MoCA), Self-Rating Anxiety Scale (SAS), Center for Epidemiogical Studies Depression Scale (CES-D), Screening Scale for Parkinson’s disease (SSPD), Activity of Daily Living (ADL), and Global Deterioration Scale (GDS). Polymerase chain reaction restriction fragment length polymorphism (PCR-RFLP) was used to detect the polymorphism of CST3. Results The allele A frequency was 80.4% and 90.9% respectively in T2DM-MCI group and T2DM-NC group, and that of allele B were 19.6% and 9.1% respectively. There were significant differences between the 2 groups (Chi-square＝7.005, P＝0.008). CST3 B allele carrying was a risk factor for MCI in the T2DM elderly (OR＝2.279, 95% CI＝1.064 to 4.882, P＝0.034). Conclusion CST3 B allele carrying is one of the risk factors for MCI in the T2DM elderly. Detection of CST3 polymorphism is helpful in the early diagnosis of MCI for the elderly people with T2DM.