Epidemiologic studies have documented an association between diabetes and increased risk of cognitive decline in the elderly. Based on animal model studies, several mechanisms have been proposed to explain such an association, including central insulin signaling, neurodegeneration, brain amyloidosis, and neuroinflammation. Nevertheless, the exact mechanisms in humans remain poorly defined. It is reasonable, however, that many pathways may be involved in these patients leading to cognitive impairment. A major aim of clinicians is identifying early onset of neurologic signs and symptoms in elderly diabetics to improve quality of life of those with cognitive impairment and reduce costs associated with long-term complications. Several biomarkers have been proposed to identify diabetics at higher risk of developing dementia and diagnose early stage dementia. Although biomarkers of brain amyloidosis, neurodegeneration and synaptic plasticity are commonly used to diagnose dementia, especially Alzheimer disease, their role in diabetes remains unclear. The aim of this review is to explore the molecular mechanisms linking diabetes with cognitive decline and present the most important findings on the clinical use of biomarkers for diagnosing and predicting early cognitive decline in diabetics.