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Introduction: Diabetes mellitus (DM) is associated with cognitive decline and dementia in the elderly. The glymphatic system mediates clearance of the interstitial solutes in the brain by exchange of cerebrospinal and interstitial fluid (CSF and ISF). We recently demonstrated that DM in aged rat induces impairment of the glymphatic system and cognitive decline. Exosomes, membrane vesicles, mediate intercellular communication by transferring their cargo into recipient cells. The present study investigated whether cerebral endothelial exosomes (CEE) ameliorate glymphatic system impairment and improve cognitive function in aged DM rats.Methods and Results: DM was induced in male Wistar rats (13 months, n=48) by injection of nicotinamide and streptozotocin. Two months after DM, rats were treated with CEE (1x1011 exosomes/rat, IV) twice a week for 4 weeks. Age matched DM and non-DM rats were used as controls. CEE were harvested from the cultured cerebral endothelial cells of health young adult rats. Exchanges of CSF and ISF were measured by intracisternal injection of fluorescent tracer, Texas Red-dextran (TR, 3kD). Confocal microscopic analysis of brain slices revealed a progressive slowdown of ISF clearance in the hippocampi, assessed by retention of TR starting at 2.5 fold at 2M (13±5 vs 5±3% of area) and increasing to 4 fold at 4M (21±4 vs 5±2%) of DM. Paravascular amyloid β (Aβ) accumulation was only detected at 4M of DM. The CEE treatment significantly (p<0.05) reduced TR retention (10±4%) at 4M of DM and also decreased Aβ accumulation (2±1 vs 6±2/mm2) and parenchymal fibrin deposition (9±5 vs 23±5/mm2) compared to untreated DM rats. Moreover, the CEE treatment significantly improved hippocampal related learning and memory measured by the Morris Water Maze and odor-based novelty recognition for olfactory memory, without altering the glucose level. In vitro, cerebral endothelial cells isolated from 2M DM rats exhibited substantial dysfunction as measured by capillary-like tube formation and cell migration, whereas incubation with the CEE substantially reversed endothelial dysfunction.Conclusions: The CEE treatment reduces DM-induced glymphatic and cerebral endothelial dysfunctions, leading to improvement of cognitive function in aged DM rats.