Evidence links type 2 diabetes to dementia risk. However, our knowledge on the initial cognitive deficits in diabetic individuals and the factors that might promote such deficits is still limited. This study aimed to identify the cognitive domains initially impaired by diabetes and the factors that play a role in this first stage. Within the population-based Swedish National Study on Aging and Care-Kungsholmen, 2305 cognitively intact participants aged ≥60 y were identified. Attention/working memory, perceptual speed, category fluency, letter fluency, semantic memory, and episodic memory were assessed. Diabetes (controlled and uncontrolled) and prediabetes were ascertained by clinicians, who also collected information on vascular disorders (hypertension, heart diseases, and stroke) and vascular risk factors (VRFs, including smoking and overweight/obesity). Data were analyzed with linear regression models. Overall, 196 participants (8.5%) had diabetes, of which 144 (73.5%) had elevated glycaemia (uncontrolled diabetes); 571 (24.8%) persons had prediabetes. In addition, diabetes, mainly uncontrolled, was related to lower performance in perceptual speed (β - 1.10 [95% CI - 1.98, - 0.23]), category fluency (β - 1.27 [95% CI - 2.52, - 0.03]), and digit span forward (β - 0.35 [95% CI - 0.54, - 0.17]). Critically, these associations were present only among APOEɛ4 non-carriers. The associations of diabetes with perceptual speed and category fluency were present only among participants with VRFs or vascular disorders. Diabetes, especially uncontrolled diabetes, is associated with poorer performance in perceptual speed, category fluency, and attention/primary memory. VRFs, vascular disorders, and APOE status play a role in these associations.