ABSTRACT: Background:African Americans typically perform worse than European Americans on cognitive testing. Contributions of cardiovascular disease (CVD) risk factors and educational quality to cognitive performance and brain volumes were compared in European Americans and African Americans with type 2 diabetes. Methods:Association between magnetic resonance imaging-determined cerebral volumes of white matter (WMV), gray matter (GMV), white matter lesions (WMLV), hippocampal GMV, and modified mini-mental state exam (3MSE), digit symbol coding (DSC), Rey Auditory Verbal Learning Test (RAVLT), Stroop, and verbal fluency performance were assessed in Diabetes Heart Study Memory in Diabetes (MIND) participants. Marginal models incorporating generalized estimating equations were employed with serial adjustment for risk factors. Results:The sample included 520 African Americans and 684 European Americans; 56 per cent female with mean ± SD age 62.8 ± 10.3 years and diabetes duration 14.3 ± 7.8 years. Adjusting for age, sex, diabetes duration, BMI, HbA1c, total intracranial volume, scanner, statins, CVD, smoking, and hypertension, WMV (p = .001) was lower and WMLV higher in African Americans than European Americans (p = .001), with similar GMV (p = .30). Adjusting for age, sex, education, HbA1c, diabetes duration, hypertension, BMI, statins, CVD, smoking, and depression, poorer performance on 3MSE, RAVLT, and DSC were seen in African Americans (p = 6 × 10-23-7 × 10-62). Racial differences in cognitive performance were attenuated after additional adjustment for WMLV and nearly fully resolved after adjustment for wide-range achievement test (WRAT) performance (p = .0009-.65). Conclusions:African Americans with type 2 diabetes had higher WMLV and poorer cognitive performance than European Americans. Differences in cognitive performance were attenuated after considering WMLV and apparent poorer educational quality based on WRAT.