As impaired insulin signalling (IIS) is a risk factor for Alzheimer’s disease we crossed mice (Tg2576) over-expressing human amyloid precursor protein (APP), with insulin receptor substrate 2 null (Irs2^−/−) mice which develop insulin resistance. The resulting Tg2576/Irs2^−/− animals had increased tau phosphorylation but a paradoxical amelioration of Aβ pathology. An increase of the Aβ binding protein transthyretin suggests that increased clearance of Aβ underlies the reduction in plaques. Increased tau phosphorylation correlated with reduced tau-phosphatase PP2A, despite an inhibition of the tau-kinase glycogen synthase kinase-3. Our findings demonstrate that disruption of IIS in Tg2576 mice has divergent effects on pathological processes—a reduction in aggregated Aβ but an increase in tau phosphorylation. However, as these effects are accompanied by improvement in behavioural deficits, our findings suggest a novel protective effect of disrupting IRS2 signalling in AD which may be a useful therapeutic strategy for this condition.