Anemia causes hypo-oxygenation in the brain, which could lead to cognitive disorders. We examined dietary iron intake as well as anemia markers (i.e., hemoglobin, hematocrit, mean corpuscular volume) and diabetes coexistence in relation to neuropsychological function and quality of life. In this study, 6117 community-dwelling adults aged 55–75 years (men) and 60–75 years (women) with overweight/obesity and metabolic syndrome were involved. We performed the Mini-Mental State Examination (MMSE), the Trail Making Test parts A and B (TMT-A/B), Semantic Verbal Fluency of animals (VFT-a), Phonological Verbal Fluency of letter P (VFT-p), Digit Span Test (DST), the Clock Drawing Test (CDT), and the Short Form-36 Health Survey (SF36-HRQL test). Dietary iron intake did not influence neuropsychological function or quality of life. However, anemia and lower levels of anemia markers were associated with worse scores in all neurophysiological and SF36-HRQL tests overall, but were especially clear in the MMSE, TMT-B (cognitive flexibility), and the physical component of the SF36-HRQL test. The relationships between anemia and diminished performance in the TMT-A/B and VFT tasks were notably pronounced and statistically significant solely among participants with diabetes. In brief, anemia and reduced levels of anemia markers were linked to inferior cognitive function, worse scores in different domains of executive function, as well as a poorer physical, but not mental, component of quality of life. It was also suggested that the coexistence of diabetes in anemic patients may exacerbate this negative impact on cognition. Nevertheless, dietary iron intake showed no correlation with any of the outcomes. To make conclusive recommendations for clinical practice, our findings need to be thoroughly tested through methodologically rigorous studies that minimize the risk of reverse causality.