Objective. Microalbuminuria (MA), a marker of renal microvascular disease, is associated with brain atrophy and neurovascular changes in older adults with type 2 diabetes mellitus (DM). We evaluated the relationship between urine albumin-to-creatinine ratio (UACR) and regional brain volumes to determine whether subclinical albuminuria may indicate early structural brain changes in type 2 DM. Methods. We studied UACR and brain volumes in 85 type 2 DM patients (64.8± 8.3 years) and 40 age-matched controls using 3D magnetization prepared rapid acquisition with gradient echo (MP-RAGE) MRI (magnetic resonance imaging) at 3 Tesla. The relationship between UACR and brain volumes was analyzed using the least square models. Results. In DM patients, UACR ≥5 mg/g, UACR ≥10 mg/g and clinically significant MA (UACR ≥17 mg/g [males] and 25 mg/g [females]) were associated with lower gray matter (GM) volume in the frontal lobe (r2 adj = 0.20.4, P = 0.010.05) and UACR ≥5 mg/g was also related to global GM atrophy (r2 adj = 0.1, P = 0.04), independent of DM duration, glucose levels, HbA1c and hypertension. For UACR ≥5 mg/g, a lower global GM volume was related to worse executive function (P = 0.04) in the DM group. No associations were found for UACR (>5 mg/g) and controls. Conclusions. Subclinical albuminuria (UACR ≥5 mg/g) is associated with lower GM volume that has clinical impact on cognitive function in older diabetic patients, and these relationships are independent of DM control and hypertension. Therefore, UACR levels may serve as an additional marker of DM-related brain structural changes.