Lower extremity skeletal muscle mass (LESM) in Type 2 Diabetes (T2D) has been linked to adverse clinical events, but it is not known whether it is associated with cognitive difficulties. We conducted a cross-sectional study on 1,235 people (mean age 61.4 ± 8.0 years) with T2D under primary and secondary care in Singapore. Bioelectrical impedance analyses (BIA) measures of upper extremity skeletal muscle mass (UESM), LESM and appendicular skeletal muscle index (SMI) were related to the Repeatable Battery for the Assessment of Neuropsychological Status (RBANS) measures of cognition, in multiple linear regression. In multivariable models, tertile 1 LESM (b = -2.62 (-3.92 to -1.32)) and tertile 2 LESM (b = -1.73 (-2.73 to -0.73)), referenced to tertile 3) were significantly associated with decreased RBANS total score. Significant associations of LESM with cognitive domain performances were observed for tertile 1 (b = -3.75 (-5.98 to -1.52)) and tertile 2 (b = -1.98 (-3.69 to -0.27)) with immediate memory, and for tertile 1 (b = -3.05 (-4.86 to -1.24)) and tertile 2 (b = -1.87 (-3.25 to -0.48)) with delayed memory, and for tertile 1 (b = -2.99 (-5.30 to -0.68)) with visuospatial/constructional ability. Tertile 1 SMI (b = -1.94 (-3.79 to -0.08) and tertile 2 SMI (b = -1.75 (-3.14 to -0.37)) were also associated with delayed memory. There were no associations between UESM with cognitive performance. Lower LESM may be a useful marker of possible co-occuring cognitive dysfunction.