Diabetic-associated cognitive dysfunction(DACD) is one of the common complications of diabetes, and its pathogenesis is complex. It usually involves multiple pathological links such as insulin resistance, impaired blood-brain barrier, oxidative stress and inflammatory response, intestinal flora imbalance, as well as β-amyloid protein(Aβ) deposition and Tau protein phosphorylation. In recent years, traditional Chinese medicine has demonstrated unique advantages in the prevention and treatment of DACD due to its characteristics of multiple components and multiple targets. Traditional Chinese medicine compound prescriptions, single herbs and their active ingredients can comprehensively improve DACD through multiple mechanisms such as reducing inflammation, improving blood-brain barrier function and regulating neural function. This article summarizes the pathogenesis of DACD and elaborates in detail on the research progress of traditional Chinese medicine in improving DACD over the past two decades, providing important theoretical support for clinical application.