Background: β-Site APP-cleaving enzyme 1 (BACE1) is a key enzyme involved in the pathophysiology of Type 2 Diabetes Mellitus (T2DM) and Mild Cognitive Impairment (MCI). We aimed to investigate the potential associations of plasma BACE1 levels and BACE1 gene polymorphism with different cognitive performances in T2DM patients with MCI. Methods: The recruited 186 T2DM subjects were divided into 92 MCI group and 94 healthy-cognition controls, according to the Montreal Cognitive Assessment (MoCA) scores. Sociodemographic characteristics, clinical parameters and neuropsychological tests were assessed. BACE1 C786G gene polymorphism and plasma BACE1 level were determined. Results: Compared to controls, MCI patients exhibited higher plasma BACE1 levels. Plasma BACE1 levels were negatively associated with MoCA, Clock Drawing Test and Logical Memory Test scores, whereas positively associated with Trail Making Test-B time in the MCI group (all p<0.05), after adjusting fasting blood glucose, glycosylated hemoglobin, and homeostasis model assessment of insulin resistance by C-peptide. Multivariable logistic regression analysis showed a significant trend towards increased MCI risk with high plasma BACE1 level in T2DM patients (OR = 1.492, p = 0.027). The plasma BACE1 levels of GG and GC genotypes were obviously higher than that of CC genotype in T2DM-MCI patients (p = 0.035; p = 0.026, respectively). Conclusion: Increased plasma BACE1 levels were associated with poor overall cognition functions, especially visuospatial abilities, visual/logical memory and executive functions in T2DM-MCI patients. Additionally, elevated plasma BACE1 level was a risk factor for MCI in T2DM patients, and might be influenced by BACE1 C786G gene mutations.