OBJECTIVE We sought to examine the presence and severity of brain small vessel disease (SVD) in patients with type 2 diabetes and diabetic retinopathy (DR) compared with those without DR. RESEARCH DESIGN AND METHODS We evaluated 312 patients with type 2 diabetes without previous cardiovascular disease (men 51%; mean age 57 years; age range 40–75 years); 153 patients (49%) had DR. MRI was performed to evaluate the presence and severity (age-related white matter changes scale) of white matter lesions (WMLs) and lacunes, and transcranial Doppler ultrasound was used to measure the Gosling pulsatility index (PI) of the middle cerebral artery (MCA). RESULTS The prevalence of lesions of cerebral SVD (WML and/or lacunes) was higher in patients with DR (40.2% vs. 30.1% without DR, P = 0.04). Age (P < 0.01) and systolic blood pressure (P = 0.02) were associated with the presence of SVD. The severity of SVD was associated with age and the presence of DR (P < 0.01 and P = 0.01, respectively). Patients with DR showed a higher MCA PI compared with those without DR (P < 0.01). Age, systolic and diastolic blood pressure, and retinopathy and its severity were associated with an increased MCA PI (P < 0.01 for all variables). A positive correlation was found between MCA PI values and the presence and severity of SVD (P < 0.01 for both variables). CONCLUSIONS Patients with type 2 diabetes who have DR have an increased burden of cerebral SVD compared with those without DR. Our findings suggest that the brain is a target organ for microangiopathy, similar to other classic target organs, like the retina.