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To better understand the impact of type 2 diabetes, the relationship between ethnicity, specifically Mexican/Mexican American ethnicity, and the disease must be further investigated. This study specifically examined the cognitive impact of type 2 diabetes. Data from the 2014 Health and Retirement Study was used to compare the cognitive functioning of non-Hispanic White (n = 10,658) and White Mexican/Mexican American (n = 847) individuals, age 50+ years, with and without type 2 diabetes. Serial 7's and immediate and delayed recall—hypothesized to be more negatively affected by type 2 diabetes and Mexican American status—was compared controlling for age, education, and depression. A multivariate analysis of covariance (MANCOVA) indicated significant main effects for race/ethnicity (F(3,11496) = 11.15, p < .001) and diabetes status (F(3,11496) = 3.15, p < .024), with Mexican Americans and those with diabetes having worse cognitive performance. There were significant effects for all covariates. A step-wise multiple regression indicated that education, age, depression, race/ethnicity and diabetes status accounted for a combined 28.4% of variance in a cognitive performance composite. Implications for assessment and treatment are discussed.