Aims This study investigated dynamic cerebral autoregulation in Type 2 diabetes, where dynamic cerebral autoregulation may be impaired as a consequence of microvascular changes and/or autonomic neuropathy. Methods Eleven healthy control subjects and 11 age‐ and sex‐matched patients with Type 2 diabetes controlled with lifestyle modifications or oral anti‐diabetes treatment were recruited. Dynamic cerebral autoregulation was calculated by the autoregressive moving average autoregulatory index from a continuous blood pressure and R‐R interval (time between each ventricular systole) recording. End‐tidal carbon dioxide was also monitored and changes in response to breath holding and hyperventilation as a metabolic stimulus were measured. Results No significant differences were seen in cerebral blood flow velocity at baseline, or in response to breath holding between people with diabetes and control subjects, although the cerebral blood flow velocity response associated with hyperventilation was significantly reduced in the diabetes group. No significant differences in dynamic cerebral autoregulation were seen at baseline or in response to respiratory manoeuvres between the groups. Conclusions Dynamic cerebral autoregulation is not impaired in patients with Type 2 diabetes, although a small difference could not be excluded as the study was only powered to detect an autoregulatory index difference > 2 units. Further study in a larger population with a spectrum of disease severity may reveal clinically important differences.