Alzheimer's disease (AD) is associated with major impairments in insulin and insulin-like growth factor (IGF) gene expression and signaling in the brain. These abnormalities increase with severity of dementia, and are associated with deficiencies in energy metabolism and acetylcholine homeostasis. The co-existence of brain insulin/IGF deficiency and resistance suggests that AD may represent a brain-specific form of diabetes, i.e. Type 3 diabetes. This hypothesis is supported by the findings in an experimental animal model in which intracerebral (ic) Streptozotocin (STZ) was used to deplete brain and not pancreatic insulin. The ic-STZ treatment produced brain-specific insulin depletion and insulin resistance are associated with progressive neurodegeneration that shares many features in common with AD. We now demonstrate that early treatment with peroxisome-proliferator activated receptor agonists can effectively prevent ic-STZ-induced neurodegeneration and its associated deficits in learning and memory. These effects were mediated by increased binding to insulin receptors, reduced levels of oxidative stress and tau phosphorylation, and increased choline acetyltransferase expression in the brain, suggesting that insulin sensitizer agents may have therapeutic efficacy in early AD.