This study aimed to assess the prevalence and correlates of sexual dysfunction in a sample of Dutch men and women with type 2 diabetes. Patients with type 2 diabetes who were between the ages of 40 and 75 years from 4 Dutch diabetes centers were asked to complete self-report questionnaires covering sociodemographic characteristics, medical characteristics, clinical depression (Center for Epidemiological Studies), and sexual dysfunction (in men: International Index of Erectile Function; in women: Female Sexual Function Index). In total, 158 type 2 diabetes patients (68% men) completed the cross-sectional survey. On the basis of predefined criteria, 69% of men and 70% of women were classified with some degree of sexual dysfunction. Univariable logistic regression analyses revealed that sexual dysfunctions were associated with higher age, clinical depression (Center for Epidemiological Studies score ≥16), and one or more diabetes-related complications in both men and women. Multivariable logistic regression analyses revealed that clinical depression was most strongly associated with both male (OR = 6.87, 95% CI [1.77, 26.63]) and female (OR = 9.33, 95% CI [1.03, 84.87]) sexual dysfunction. In conclusion, sexual dysfunction is highly prevalent in men and women with type 2 diabetes and is associated with higher age, clinical depression, and diabetes-related complications. These results suggest that addressing sexual dysfunction in diabetes care is important.