Diabetes mellitus is a metabolic disease often accompanied by a series of complications, such as diabetic nephropathy, retinopathy, and diabetic foot. The survival time of diabetics has been significantly prolonged due to advancements in medicine. However, the prolonged survival time for diabetics can increase the prevalence of diabetic central nervous system disease. Diabetic encephalopathy (DE) has become one of the main complications of the disease, and the main clinical manifestation of DE is cognitive dysfunction. However, the typical morphological and pathological characteristics of the brain in DE are rarely systematically reported. Thus, this phenomenon severely restricts the diagnosis and treatment of DE. This article presents a description of the pathology characteristics of DE, including atrophy of the brain (gray matter, white matter, and hippocampus), changes in cerebrovascular morphology and function, impairment of synaptic plasticity, and dysfunction of neuroglia. In addition, abnormalities in the glymphatic clearance system of the brain are closely related to the progression of DE. A review of typical brain morphological and pathological characteristics would aid in the diagnosis and treatment of DE.