Both Alzheimer's disease (AD) and Type 2 diabetes mellitus (T2DM) share the presence of systemic and neuro-inflammation, enhanced production and accumulation of β -amyloid peptide and abnormal levels of the enzymes acetylcholinesterase (AChE) and butyrylcholinesterase (BuChE). Altered levels of AChE and BuChE both in AD as well as in T2DM imply that those two enzymes may be playing a pivotal role in the pathogenesis of the two disorders. AD and T2DM are both characterized by elevated levels of AChE and BuChE in the plasma. On the other hand, in AD the brain levels of AChE go down while those of BuChE go up, resulting in deregulation in balance between AChE and BuChE. This imbalance and change in the AChE/BuChE ratio causes cholinergic deficit in the brain, i.e. deficiency in the brain neurotransmitter acetylcholine. With better understanding of the inter-relationship of AChE and BuChE levels in normality as well as abnormality, AD and T2DM can be effectively treated. Thus, general cholinesterase inhibitors that inhibit both AChE and BuChE as well as highly selective BuChE inhibitors may have potential therapeutic benefits in the treatment of AD and other related dementias.