Type 2 diabetes mellitus (DM) appears to be a significant risk factor for Alzheimer disease (AD). Insulin and insulin‐like growth factor‐1 (IGF‐1) also have intense effects in the central nervous system (CNS), regulating key processes such as neuronal survival and longevity, as well as learning and memory. Hyperglycaemia induces increased peripheral utilization of insulin, resulting in reduced insulin transport into the brain. Whereas the density of brain insulin receptor decreases during age, IGF‐1 receptor increases, suggesting that specific insulin‐mediated signals is involved in aging and possibly in cognitive decline. Molecular mechanisms that protect CNS neurons against β‐amyloid‐derived‐diffusible ligands (ADDL), responsible for synaptic deterioration underlying AD memory failure, have been identified. The protection mechanism does not involve simple competition between ADDLs and insulin, but rather it is signalling dependent down‐regulation of ADDL‐binding sites. Defective insulin signalling make neurons energy deficient and vulnerable to oxidizing or other metabolic insults and impairs synaptic plasticity. In fact, destruction of mitochondria, by oxidation of a dynamic‐like transporter protein, may cause synapse loss in AD. Moreover, interaction between Aβ and τ proteins could be cause of neuronal loss. Hyperinsulinaemia as well as complete lack of insulin result in increased τ phosphorylation, leading to an imbalance of insulin‐regulated τ kinases and phosphatates. However, amyloid peptides accumulation is currently seen as a key step in the pathogenesis of AD. Inflammation interacts with processing and deposit of β‐amyloid. Chronic hyperinsulinemia may exacerbate inflammatory responses and increase markers of oxidative stress. In addition, insulin appears to act as ‘neuromodulator’, influencing release and reuptake of neurotransmitters, and improving learning and memory. Thus, experimental and clinical evidence show that insulin action influences cerebral functions. In this paper, we reviewed several mechanisms by which insulin may affect pathophysiology in AD.