Introduction: Diabetes Mellitus is a metabolic disease that can cause various complications. Increased duration of diabetes and poorer glycemic control paved way for the development of diabetic retinopathy and cognitive impairment. It became a medical and social challenge to prevent the disease in advance. Objectives: Type 2 Diabetes has become one of the major causes of morbidity worldwide. Many studies reveal that retinal microvascular diseases and diabetic retinopathy are associated with cognitive function. In this study, the severity of diabetic retinopathy is correlated with cognitive function in patients with type 2 Diabetes. Methods: A hundred patients with type 2 diabetes attending the outpatient department in a tertiary care centre were included in the study. Diabetic retinopathy was classified using the Early Treatment Diabetic Retinopathy Study classification. Patients were interviewed using three cognitive tests, Montreal Cognitive Assessment, Mini-Mental State Examination, Mini-cog and the cognitive function was assessed. HbA1c was checked on the day of administering cognitive tests and the values were noted. Results: Out of a hundred patients involved in the study, 75% of patients with diabetic retinopathy have cognitive impairment. The mean score of the more sensitive cognitive test Montreal Cognitive Assessment (MoCA), in mild and moderate Non-Prolif erative Diabetic Retinopathy (NPDR) [23.42 __ampersandsignplusmn; 2.45] is lower when compared to severe Non-Proliferative Diabetic Retinopathy (NPDR) and Proliferative Diabetic Retinopathy (PDR) [25.34 __ampersandsignplusmn; 2.43]. HbA1c of patients with cognitive impairment [11.79 __ampersandsignplusmn;1.85] is higher than patients without cognitive impairment [7.87__ampersandsignplusmn;1.65]. Conclusion: Patients with diabetic retinopathy have more cognitive impairment than with no diabetic retinopathy. On comparing the grades of diabetic retinopathy, mild and moderate Non-Proliferative Diabetic Retinopathy have more cognitive impairment than severe Non-Proliferative Diabetic Retinopathy and Proliferative Diabetic Retinopathy. Yet it cannot be proved insight be cause the minimum number of patients with severe Non-Proliferative Diabetic Retinopathy and Proliferative Diabetic Retinopa thy was involved in the study.