Objective-Caudate magnetization transfer (MT) ratios have indicated an abnormality in the macromolecular protein pool of diabetic patients. This study examined the relationship between MT ratios of the caudate and cognitive performance. Research design and methods-Diabetic patients, diabetic and depressed patients, and healthy comparison subjects completed magnetic resonance imaging and a neu-ropsychological battery. Magnetization transfer ratios of caudate and three comparison regions were computed. The neuropsychological battery was aggregated into a global index of cognitive function and correlated with MT ratios. Results-MT ratios of the caudate correlated with cognitive performance, and the correlations were stronger among diabetic patients than healthy control subjects. Comorbid depression increased the strength of the correlation compared with diabetes alone. Comparison regions showed no evidence of a diabetes effect on cognition. Conclusions-One mechanism precipitating cognitive loss during diabetes appears to be associated with cellular changes occurring in the macromolecular protein pool of the caudate. © 2009 by the American Diabetes Association.