It has been known for some time that diabetes may be associated with impaired cognitive function. During the last decade, epidemiological data have emerged suggesting a linkage between diabetes, particularly type 2 diabetes, and Alzheimer's disease (AD). There is evidence to suggest that impaired activities of neurotrophic factors such as insulin, IGF-1 and NGF, which occur in both diabetes and AD, may provide a mechanistic link between the two disorders. An additional probable factor that has been less evaluated to date is hypercholesterolemia, a common accompaniment to type 2 diabetes. Increased cholesterol availability is believed to play a crucial role in the abnormal metabolism of amyloid precursor protein leading to accumulation of amyloid-beta. Impaired insulin signaling in particular appears to be involved in hyperphosphorylation of the tau protein, which constitutes neurofibrillary tangles in AD. The linkage between abnormal amyloid metabolism and phosphor-tau is likely to be provided by the activation of caspases both by increased amyloid-beta and by impaired insulin signaling. Although the details of many of these components still await evaluation, it appears clear that commonalities exist in the underlying pathogenesis of diabetes and Alzheimer's disease. In this review we provide a brief update on linkages between these two diverse but common disorders.