Dementia and type 2 diabetes are both characterized by long prodromal phases, challenging the study of potential risk factors and their temporal relation. The progressive relation among metabolic syndrome, insulin resistance (IR), and dementia has recently been questioned, wherefore the aim of this study was to assess the potential association among these precursors of type 2 diabetes and cognitive dysfunction. Using data from the Prospective Epidemiological Risk Factor (PERF) Study (n = 2,103), a prospective study of elderly women in Denmark, we found that impaired fasting plasma glucose concentration was associated with 44% (9–91%) larger probability of cognitive dysfunction. In addition, subjects above the HOMA-IR threshold (HOMA-IR >2.6) had 47% (9–99%) larger odds of cognitive dysfunction. The associations could indicate that a significant proportion of dementia cases in women is likely to be preventable by effective prevention and control of the insulin homeostasis.