Aim of the study was to determine the rate of depression and anxiety in the patients with diagnosed Type 2 Diabetes mellitus (DM), and also to determine the state of the congnitive functions in patients with Type 2 Diabetes mellitus compared with the control group. Study was designed as a epidemiological cross sectional study, sample consisted of 108 patients, 66 of the patients were diagnosed with Type 2 Diabetes mellitus, and 42 were control group. All of them were interviewed by psychiatrist and tested through clinical interview with Hamilton depression rating scale, Hamilton Anxiety rating scale, Mini mental state examination and questionnaire about sociodemografic data. Results show that group of patients with DM were statistically significant more depressed than the control group of the patients (p = 0.035). Pathological anxiety measured by Hamilton Anxiety Rating Scale (HAM-A) appeared in 34 DM patients and 7 of the patients in control group, which is also statistically significant difference (p = 0.002). Evaluation of the cognitive status done with Mini Mental State Examination (MMSE showed us the patients with DM presented more cognitive dysfunctions compared with the control group. We can conclude that the high prevalence of psychiatric disorders in diabetic patients points to the need for greater investment in appropriate diagnostic evaluation of patients that consider mental issues.