Type 2 diabetes (T2D) and Alzheimer's disease (AD) are both highly prevalent diseases worldwide, and each is associated with high-morbidity and high-mortality. Numerous clinical studies have consistently shown that T2D confers a two-fold increased risk for a dementia, including dementia attributable to AD. Yet, the mechanisms underlying this relationship, especially nonvascular mechanisms, remain debated. Cerebral vascular disease (CVD) is likely to be playing a role. But increased AD neuropathologic changes (ADNC), specifically neuritic amyloid plaques (AP) and neurofibrillary tangles (NFT), are also posited mechanisms. The clinicopathological studies to date demonstrate T2D to be consistently associated with infarcts, particularly subcortical lacunar infarcts, but not ADNC, suggesting the association of T2D with dementia may largely be mediated through CVD. Furthermore, growing interest exists in insulin resistance (IR), particularly IR within the brain itself, which may be an associated but distinct phenomenon from T2D, and possibly itself associated with ADNC. Other mechanisms largely related to protein processing and efflux in the central nervous system with altered function in T2D may also be involved. Such mechanisms include islet amyloid polypeptide (or amylin) deposition, co-localized with beta-amyloid and found in more abundance in the AD temporal cortex, blood-brain barrier breakdown and dysfunction, potentially related to pericyte degeneration, and disturbance of brain lymphatics, both in the glial lymphatic system and the newly discovered discrete central nervous system lymph vessels. Medical research is ongoing to further disentangle the relationship of T2D to dementia in the ageing human brain.