Background and Purpose: Type 2 diabetes mellitus (DM2) is associated with an increased risk of stroke. DM2 is also associated with cognitive impairments. Vascular dysfunction, such as impaired cerebrovascular reserve capacity (CVR), may be a determinant of these changes, but previous studies on CVR in DM2 have provided variable results in selected populations of patients. We aimed to examine CVR in a population-based sample of DM2 patients. Methods: The CO2 reactivity of the middle cerebral artery was examined using transcranial Doppler ultrasonography in 81 DM2 patients and 38 controls. In DM2 patients CVR was correlated with diabetic parameters, vascular risk factors and cognitive functioning.Results: CVR was similar in patients and controls (51 vs. 49%). Within the DM2 group, there was no statistically significant relationship between CVR and DM duration, HbA1c, albuminuria, blood pressure, intima-media thickness and cognition. CVR tended to be lower in diabetic patients with retinopathy [46 vs. 55%, mean difference: –7.9 (confidence interval –18.0, 2.2)]. Conclusion: We conclude that CVR is not impaired in unselected patients with DM2 and probably does not, therefore, play a major role in the aetiology of cognitive impairment.