Background Older adults are often excluded from clinical trials. Decision making for administration of statins to older patients with diabetes mellitus (DM) is under debate, particularly in frail older patients with comorbidity and high mortality risk. We tested the hypothesis that statin treatment in older patients with DM was differentially effective across strata of mortality risk assessed by the Multidimensional Prognostic Index (MPI), based on information collected with the Standardized Multidimensional Assessment Schedule for Adults and Aged Persons (SVaMA). Methods In this retrospective observational study, we estimated the mortality risk in 1712 community-dwelling subjects with DM >= 65 years who underwent a SVaMA evaluation to establish accessibility to homecare services/nursing home admission from 2005 to 2013 in the Padova Health District, Italy. Mild (MPI-SVaMA-1), moderate (MPI-SVaMA-2), and high (MPI-SVaMA-3) risk of mortality at baseline and propensity score-adjusted hazard ratios (HR) of three-year mortality were calculated according to statin treatment. Results Higher MPI-SVaMA scores were associated with lower rates of statin treatment (MPI-SVaMA-1 = 39% vs MPI-SVaMA-2 = 36% vs MPI-SVaMA-3 = 24.9%. p<0.001) and higher three-year mortality (MPI-SVaMA-1 = 12.9% vs MPI-SVaMA-2 = 24% vs MPI-SVaMA-3 = 34.4%, p<0.001). After adjustment for propensity score quintiles, statin treatment was significantly associated with lower three-year mortality irrespective of MPI-SVaMA group (interaction test p = 0.303). HRs [95% confidence interval (CI)] were 0.19 (0.14-0.27), 0.28 (0.21-0.36), and 0.26 (0.20-0.34) in the MPI-SVaMA-1, MPI-SVaMA-2, and MPI-SVaMA-3 groups, respectively. Subgroup analyses showed that statin treatment was also beneficial irrespective of age. HRs (95% CI) were 0.21 (0.15-0.31), 0.26 (0.20-0.33), and 0.26 (0.20-0.35) among patients aged 65-74, 75-84, and >= 85 years, respectively (interaction test p=0.812). Conclusions Statin treatment was significantly associated with reduced three-year mortality independently of age and multidimensional impairment in community-dwelling frail older patients with DM.