OBJECTIVES: To examine trends overtime in the incidence and in-hospital outcomes of vascular dementia (VaD) hospitalisations in patients aged 70 years or over suffering and not suffering from type 2 diabetes mellitus (T2DM) between 2004 and 2013 in Spain. DESIGN: Retrospective study. SETTING: Spain. PARTICIPANTS: National hospital discharge data were used; patients aged ≥70, discharged from a hospital with VaD as a primary diagnosis, were selected. MAIN OUTCOME MEASURES: Overall incidence, therapeutic and diagnostic procedures, comorbidities, infectious complications, duration of hospital stays and in-hospital mortality (IHM). RESULTS: In total, 170 607 admissions for VaD (34.3% with T2DM) were identified. We found a significant upward linear trend in the incidence of VaD for men and women with and without diabetes between 2004 and 2013. The adjusted incidence was higher among people with T2DM over the study period. We found a higher incidence in men than women in all years under study. A positive association between T2DM and VaD hospitalisation was found among both men (IRR 2.14, 95% CI 2.11 to 2.16) and women (incidence rate ratio (IRR) 2.22; 95% CI 2.19 to 2.25). Pneumonia was significantly associated with a higher mortality (OR 2.59, 95% CI 2.52 to 2.67). We found that percutaneous endoscopic gastrostomy was associated with lower IHM (OR 0.37, 95% CI 0.31 to 0.45), while parenteral nutrition had the opposite effect (OR 1.29, 95% CI 1.18 to 1.41). There was no association between diabetes and higher IHM (OR 0.99, 95% CI 0.93 to 1.06). The time-trend analyses of the entire sample showed a significant reduction in mortality in patients with VaD (OR 0.98, 95% CI 0.97 to 0.99). CONCLUSIONS: Incidence rates for VaD hospitalisations were twice as high in patients with diabetes compared with those without. Men had significantly higher incidence rates than women, regardless of diabetes status. In both groups studied, pneumonia and parenteral nutrition were associated with mortality while percutaneous endoscopic gastrostomy was associated with survival. Having diabetes was not associated with higher IHM after hospitalisation with VaD.