Background <p>Type 2 Diabetes Mellitus (T2DM) is a rapidly growing global health burden. Beyond vascular and metabolic complications, it is increasingly recognized as a major contributor to cognitive impairment and dementia. Cognitive dysfunction in T2DM often goes undetected until advanced stages, limiting effective intervention. Early detection strategies are therefore urgently needed. This study investigated the diagnostic potential of neuroinflammatory, metabolic/insulin signaling, and neuroprotective biomarkers in identifying cognitive impairment among T2DM patients.</p> Methods <p>In a tertiary care hospital, 200 participants were&#xa0;enrolled in a case–control study (100 participants in each group). Cognitive performance was assessed by the Montreal Cognitive Assessment (MoCA). The concentrations of HMGB1, IL-1β, TLR4, IL-6, ADAM-10, mTOR, PI3K, Akt, TNF-α, and Klotho in the serum were measured by ELISA. Analysis of correlation and receiver operating characteristic (ROC) curves were performed.</p> Results <p>MoCA assessments were lower for patients with T2DM than for controls. Elevated serum concentrations of HMGB1, IL-1β, TLR4, IL-6, ADAM-10, TNF-α, mTOR, and PI3K with lower Akt and Klotho concentrations were observed in the T2DM patients. These biomarkers negatively correlated with MoCA scores (<i>p</i> &lt; 0.001), indicating their potential role in cognitive impairment. ROC analysis identified ADAM-10 (AUC = 0.817), IL-1β (AUC = 0.792), and Klotho (AUC = 0.799) as prominent biomarkers of impairment in cognition.</p> Conclusion <p>This study demonstrates that dysregulation of neuroinflammatory and metabolic pathways is strongly associated with cognitive decline in T2DM. Given the rising global prevalence of diabetes and dementia, incorporating serum biomarkers such as ADAM-10, IL-1β, and Klotho into clinical screening may enable earlier identification, risk stratification, and timely intervention in diabetes-associated cognitive impairment.</p>