Synapse deterioration underlying severe memory loss in early Alzheimer's disease (AD) is thought to be caused by soluble amyloid beta (Abeta) oligomers. Mechanistically, soluble Abeta oligomers, also referred to as Abeta-derived diffusible ligands (ADDLs), act as highly specific pathogenic ligands, binding to sites localized at particular synapses. This binding triggers oxidative stress, loss of synaptic spines, and ectopic redistribution of receptors critical to plasticity and memory. We report here the existence of a protective mechanism that naturally shields synapses against ADDL-induced deterioration. Synapse pathology was investigated in mature cultures of hippocampal neurons. Before spine loss, ADDLs caused major downregulation of plasma membrane insulin receptors (IRs), via a mechanism sensitive to calcium calmodulin-dependent kinase II (CaMKII) and casein kinase II (CK2) inhibition. Most significantly, this loss of surface IRs, and ADDL-induced oxidative stress and synaptic spine deterioration, could be completely prevented by insulin. At submaximal insulin doses, protection was potentiated by rosiglitazone, an insulin-sensitizing drug used to treat type 2 diabetes. The mechanism of insulin protection entailed a marked reduction in pathogenic ADDL binding. Surprisingly, insulin failed to block ADDL binding when IR tyrosine kinase activity was inhibited; in fact, a significant increase in binding was caused by IR inhibition. The protective role of insulin thus derives from IR signaling-dependent downregulation of ADDL binding sites rather than ligand competition. The finding that synapse vulnerability to ADDLs can be mitigated by insulin suggests that bolstering brain insulin signaling, which can decline with aging and diabetes, could have significant potential to slow or deter AD pathogenesis.