During past decades, ever‐increasing life expectancy, despite the development of a sedentary lifestyle and altered eating habits, has led to a dramatic parallel increase in the prevalence of age‐related diseases such as type 2 diabetes mellitus (T2DM) and neurodegenerative disorders. Converging evidence from animal and human studies has indicated that insulin resistance in the central nervous system (CNS) is observed in both T2DM and neurodegenerative disorders such as Alzheimer's disease (AD), leading to the hypothesis that impaired neuronal insulin action might be a unifying pathomechanism in the development of both diseases. This assumption, however, is in striking contrast to the evolutionary conserved, protective role of impaired insulin/insulin‐like growth factor 1 signaling (IIS) in aging and in protein aggregation‐associated diseases, such as AD. Thus, this review summarizes our current understanding of the physiological role of insulin action in various regions of the CNS to regulate neuronal function, learning, and memory, and to control peripheral metabolism. We also discuss mechanisms and clinical outcomes of neuronal insulin resistance and address the seeming paradox of how impaired neuronal IIS can protect from the development of neurodegenerative disorders.