In the present study, we investigated cognitive status and cognitive development in young-old Type-2 diabetes patients. Extending previous research, using the sample of the ILSE study (“Interdisciplinary Longitudinal Study of Aging”), we applied a comprehensive cognitive test battery to 38 Type-2 diabetes patients (mean age at T1: 63 years) and 421 control participants and tested both cognitive status and longitudinal changes after four years in several cognitive domains (crystallized intelligence, verbal memory, visual memory, executive functioning, psychomotor speed, and fluid intelligence). Results revealed no cross-sectional group differences in any cognitive domain at T1 nor at T2. However, testing group differences in intraindividual change over time, reliable group differences in the change of crystallized intelligence and fluid intelligence were revealed. While controls improved in crystallized intelligence as well as in fluid intelligence over time, diabetes patients’ performance decreased. The results demonstrate that in young-old adults the effects of diabetes on cognition may only be detected by analyzing within-person changes instead of mean level differences.