To explore the disrupted thalamic functional connectivity and its relationships with cognitive dysfunction in type 2 diabetes mellitus (T2DM) by using resting-state functional magnetic resonance imaging (fMRI). A total of 38 T2DM patients and 39 well-matched healthy controls participated in the resting-state fMRI and T1-weighted imaging scans. The thalamic functional connectivity was characterized by using a seed-based whole-brain correlation method and compared T2DM patients with healthy controls. Pearson correlation analysis was performed between thalamic functional connectivity and clinical data. When compared with healthy controls, T2DM showed significantly decreased functional connectivity of the thalamus mainly in the right middle temporal gyrus (MTG), right precentral gyrus and bilateral occipital cortex; Increased functional connectivity of the thalamus was detected in the left cerebellum, bilateral middle frontal gyrus and middle cingulate gyrus (p < 0.05, corrected for AlphaSim). In T2DM patients, the decreased thalamic functional connectivity of the right MTG was positively associated with the Verbal Fluency Test score (r = 0.438, p = 0.006). Meanwhile, the decreased thalamic functional connectivity of the right cuneus was positively correlated with the Complex Figure Test-delayed score and negatively correlated with the Trail Making Test-B score, respectively (r = 0.492, p = 0.002; r = -0.504, p = 0.001). Moreover, there was no structural damage in the thalamus of T2DM patients. T2DM patients develop disrupted thalamocortical functional connectivity, which is associated with cognitive impairment in selected brain regions. Resting-state thalamocortical connectivity disturbance may play a central role in the underlying neuropathological process of T2DM-related cognitive dysfunction.