Dementia and diabetes are the two major disorders that are linked at both biochemical and molecular levels, which is due to the existing similarities between pancreatic beta-cells and neuronal cells at the transcriptional and translational levels. Both diseases have similar causative genes or factors, and dementia is one of the advanced complications in about 50-52% of patients with Type 2 Diabetes Mellitus (T2DM). Further, patients with T2DM are at a higher risk of neuronal degeneration and Alzheimer’s Disease (AD). Dementia, which is most common in AD, is associated with diminished insulin receptors by nearly 80%. The impairment in insulin signaling thus leads to the development of dementia and AD. Biochemical changes in ‘tau’ protein and amyloid-- beta proteins make them critical players in the formation of plaques in patients with dementia and AD. Here, we decode various cellular and molecular mechanisms associated with the development of dementia in patients with diabetes and AD.