Administration of erythropoietin (EPO) is neuroprotective against a variety of experimentally-induced neurological disorders. The aim was to determine if EPO protects against hippocampal neurodegeneration as well as impairment of cognition and motor performance, associated with long-term diabetes. BALB/c mice were randomly allocated between control, diabetic and EPO-treated diabetic groups. EPO-treated diabetic mice were administered EPO 0.05 U/kg/day i.p. three times/week for 10 weeks. Cognition was assessed by Morris water maze. Brain samples were processed for light microscopic evaluation of hippocampus. Controls showed gradual improvement of cognitive performance in water maze when comparing latency (p < 0.01) and distance swum to reach the platform (p = 0.001). There was a similar trend for improvement in EPO-treated diabetics (p < 0.001). Latency did not improve in diabetic animals indicating lack of learning (p = 0.79). In probe trials, controls and EPO-treated diabetics spent more time in the training quadrant than expected by chance (p < 0.001). Diabetics did not show memory recall behavior; performance was significantly worse than expected by chance (p = 0.023). In diabetics, there was neurodegeneration in hippocampus and reduction in number of granule cells (p < 0.01) in the dentate gyrus. EPO treatment improved these neurodegenerative changes and preserved numbers of granule cells (p < 0.1, compared to controls). Erythropoietin treatment is protective against cognitive deficits and hippocampal neurodegeneration in diabetic mice.