Recent studies have demonstrated that insulin plays important roles in the brain, including regulation of glucose metabolism and modulation of learning and memory. We have found dysregulation of brain insulin signaling in both Alzheimer's disease (AD) and type 2 diabetes (T2D), which correlates to hyperphosphorylation of tau, a key abnormal tau modification leading to neurofibrillary tangles. Here, we investigated tau phosphorylation and the two key components of the insulin signaling pathway, protein kinase B (AKT) and glycogen synthase kinase-3β (GSK-3β), in a rat model of T2D produced by a high protein, high glucose, and high fat diet followed by intraperitoneal injection of streptozocin. We found tau hyperphosphorylation, decreased AKT activation, and GSK-3β over-activation in T2D rat brains. Intranasal insulin treatment for four weeks normalized AKT and GSK-3β, as well as reduced tau hyperphosphorylation in T2D rat brains, whereas four-week treatments with subcutaneous insulin had minimal effects on brain GSK-3β and tau phosphorylation. These results suggest decreased brain insulin signaling and tau hyperphosphorylation in the rat model of T2D and demonstrate the efficacy of intranasal insulin treatment to reverse these brain abnormalities. Our findings provide further mechanism by which T2D increases the risk for AD and also support the potential use of intranasal insulin for the treatment of AD.