Cognitive functioning depends on intact brain networks that can be assessed with functional magnetic resonance imaging (fMRI) techniques. We hypothesized that cognitive decrements in type 1 diabetes mellitus (T1DM) are associated with alterations in resting-state neural connectivity and that these changes vary according to the degree of microangiopathy. T1DM patients with (MA(+): n = 49) and without (MA(-): n = 52) microangiopathy were compared with 48 healthy control subjects. All completed a neuropsychological assessment and resting-state fMRI. Networks were identified using multisubject independent component analysis; specific group differences within each network were analyzed using the dual-regression method, corrected for confounding factors and multiple comparisons. Relative to control subjects, MA(-) patients showed increased connectivity in networks involved in motor and visual processes, whereas MA(+) patients showed decreased connectivity in networks involving attention, working memory, auditory and language processing, and motor and visual processes. Better information-processing speed and general cognitive ability were related to increased degree of connectivity. T1DM is associated with a functional reorganization of neural networks that varies, dependent on the presence or absence of microangiopathy.