To assess changes in medication use after a diagnosis of dementia in individuals with type 2 diabetes mellitus. Difference-in-differences analysis of changes in the number of dispensed chronic medications between individuals with and without newly diagnosed dementia. Integrated healthcare delivery system, Kaiser Permanente Northern California. Individuals aged 50 and older without prevalent dementia with type 2 diabetes mellitus enrolled in a baseline survey. During 5 years of follow-up, 193 individuals with a new diagnosis of dementia were identified, and risk-set sampling was used to randomly select five reference subjects per case matched on 5-year age categories and sex (965 matched participants), resulting in an analytical sample of 1,158. The exposure was new diagnosis of dementia. The primary outcome was change in number of current chronic medications (total, cardiovascular (blood pressure and lipid control), diabetes mellitus) at three times: 1 year before index date (preindex date), date of diagnosis of dementia or matched reference date (index date), and up to 1 year after index date or end of follow-up if censored before 1 year (postindex date). After adjustment, the number of chronic medications and the subset of cardiovascular medications declined after a dementia diagnosis in the overall cohort and in age-, sex-, and time-matched reference individuals, but the decline was significantly greater in the group with dementia (0.71 medications fewer than the reference group, P = .02). The number of diabetes mellitus medications declined in both groups, but the declines were not statistically different (0.18 medications fewer than the reference group, P = .008). Use of cardiometabolic medications fell after a diagnosis of dementia, as recommended in national guidelines.