Neurobehavioral and electrophysiologic studies were carried out to determine the effect of diabetes mellitus on cognitive function in subjects over the age of 60 years. Forty-three non-insulin-dependent diabetic men were compared with 41 male nondiabetic age-matched controls. The diabetic patients were significantly inferior to the control group in the serial learning task and Benton's Visual Retention Test. The digit span test showed no difference between the groups. Electroencephalogram (EEG)-frequency-band analysis revealed slowing over the central cortex and reduction of alpha activity over the parietal area in diabetic patients. Acute hyperglycemia induced in healthy volunteers with the administration of 50 g of intravenous glucose did not have any effect on the dominant EEG rhythms. The checkerboard elicited P100 wave did not reveal a significant increase in latency nor were the P300 wave latencies significantly different in diabetic patients. However, a trend toward longer latencies in diabetics was evident at Fz and Cz recording sites. Acute hyperglycemia in healthy volunteers did not alter the P300 wave component. The results indicate that elderly type 2 diabetic patients have an impairment in retrieval of recently learned material with preservation of auditory attention and immediate recall. The EEG data suggest that there may be some central neural pathologic condition associated with diabetes.