Risks of falls among older adults are multifactorial in nature. A combined training program might be beneficial on fall-related outcomes. This study aimed to explore the effects of group-based physical-cognitive trainings on physical and psychological outcomes among older adults with type 2 diabetes mellitus (T2DM) and balance impairment. Fall incidence were also determined. Thirty-seven older adults with T2DM and balance impairment were randomly assigned to control and intervention groups. The intervention program comprised of 24 training sessions of 45–60 min exercise for 8 weeks. The exercise consisted of warm-up, aerobic exercise by nine square stepping, resistance exercise combined with cognitive training and cool down. All participants were assessed at baseline, 4 and 8 weeks after intervention, and 1-year follow-up. Both groups reported similar rates of falls. Global cognition, depressive symptoms, and fear of falling did not differ between groups at any time. The Timed Up & Go (TUG) test, alternate stepping test (AST), knee extensors, ankle plantarflexors, and dorsiflexors strength differed at 4 weeks. TUG, AST, hip abductors, knee flexors, ankle plantarflexors, and dorsiflexors strength differed at 8 weeks. The activity of daily living (ADL), TUG test (P=0.002) and AST, hip extensors and abductors, knee extensors and flexors, ankle plantarflexors and dorsiflexors were different at 1-year follow-up. The group-based physical-cognitive training could benefit older adults with T2DM in terms of maintaining ADL. The intervention could reduce fall risk factors by improving balance and lower limb muscle strength among older adults with T2DM and balance impairment.