Objective To investigate the correlation of serum cystatin C (Cys C) level with cognitive impairment in the elderly type 2 diabetic (T2DM) patients. Methods A total of 352 T2DM patients hospitalized in Department of Geriatrics from December 2011 to December 2013 were included in this cross-sectional study. Mini-Mental Status Examination (MMSE) and Montreal Cognitive Assessment (MoCA) were applied to evaluate their cognitive function. According to the results, the cohort was divided into normal cognition group (NC, n＝146), mild cognitive impairment group (MCI, n＝112), and Alzhermer’s disease group (AD, n＝94). Their blood glucose, blood lipids, Cys C levels, and liver and kidney function were tested. The clinical features and Cys C levels were compared among the 3 groups. Results There were significant differences in serum Cys C levels among the 3 groups (all P＜0.05). The patients in NC group had the lowest serum level of Cys C, followed by those from MCI and AD groups. Spearman correlation analysis showed that the serum level was positively correlated with age, duration of diabetes, triglycerides, serum creatinine, and HbA1c (r＝0.352, 0.199, 0.177, 0.616, and 0.368, respectively, all P＜0.05), and was negatively correlated with the scores of MMSE, MoCA and high density lipoprotein-cholesterol (r＝-0.186, -0.237, and -0.185, respectively, P＜0.05). Logistic regression analysis showed that the serum level of Cys C (P＝0.011, OR＝2.120), age (P＝0.021, OR＝3.401), diabetes duration (P＝0.033, OR＝3.102), and HbA1c (P＝0.010, OR＝2.691) were independent impact factors for diabetic cognitive impairment in the elderly. Conclusion Serum Cys C is correlated with cognitive impairment in the elderly with T2DM. High serum level of Cys C predicts the increasing risk of cognitive impairment in the population.