Insulin resistance and diabetes might promote neurodegenerative disease, but a molecular link between these disorders is unknown. Many factors are responsible for brain growth, patterning, and survival, including the insulin-insulin-like growth factor (IGF)-signaling cascades that are mediated by tyrosine phosphorylation of insulin receptor substrate (IRS) proteins. Irs2 signaling mediates peripheral insulin action and pancreatic beta-cell function, and its failure causes diabetes in mice. In this study, we reveal two important roles for Irs2 signaling in the mouse brain. First, disruption of the Irs2 gene reduced neuronal proliferation during development by 50%, which dissociated brain growth from Irs1-dependent body growth. Second, neurofibrillary tangles containing phosphorylated tau accumulated in the hippocampus of old Irs2 knock-out mice, suggesting that Irs2 signaling is neuroprotective. Thus, dysregulation of the Irs2 branch of the insulin-Igf-signaling cascade reveals a molecular link between diabetes and neurodegenerative disease.