Diabetic cognitive dysfunction (DCD), usually accompanied with chronically elevated glucocorticoids and hippocampal astrocytic alterations, is one of the most serious complications in patients with type-1 diabetes. However, the role for chronically elevated glucocorticoids and hippocampal astrocytic activations in DCD remains to be elucidated, and it is not clear whether astrocytic N-myc downstream-regulated gene 2 (NDRG2, involved in cell differentiation and development) participated in DCD. In the present study, three months after streptozotocin (STZ)-induced type-1 diabetes onset, rats showed cognitive impairments in Morris water maze test as well as elevated corticosterone level. Diabetic rats also presented down-regulation of glial fibrillary acidic protein (GFAP, a key indicator of astrocytic reactivity) and NDRG2 in hippocampus revealed by immunohistochemistry staining, real-time PCR and Western blot. Moreover, the diabetic cognitive impairments were ameliorated by 9-day glucocorticoids receptor (GR) blockade with RU486, and the down-regulation of hippocampal NDRG2 and GFAP in diabetic animals was also attenuated by 9-day GR blockade. These results suggest that glucocorticoids-GR system is crucial for DCD, and that astrocytic reactivity and NDRG2 are involved in these processes. Thus, inhibiting GR activation in the hippocampus may be a novel therapeutic strategy for treating DCD.