Type 2 diabetes mellitus (T2DM) increases the risk of neurological diseases, yet how brain oscillations change as age and T2DM interact is not well characterized. To delineate the age and diabetic effect on neurophysiology, we recorded local field potentials with multichannel electrodes spanning the somatosensory cortex and hippocampus (HPC) under urethane anesthesia in diabetic and normoglycemic control mice, at 200 and 400 days of age. We analyzed the signal power of brain oscillations, brain state, sharp wave associate ripples (SPW-Rs), and functional connectivity between the cortex and HPC. We found that while both age and T2DM were correlated with a breakdown in long-range functional connectivity and reduced neurogenesis in the dentate gyrus and subventricular zone, T2DM further slowed brain oscillations and reduced theta-gamma coupling. Age and T2DM also prolonged the duration of SPW-Rs and increased gamma power during SPW-R phase. Our results have identified potential electrophysiological substrates of hippocampal changes associated with T2DM and age. The perturbed brain oscillation features and diminished neurogenesis may underlie T2DM-accelerated cognitive impairment.