Prediabetes and Alzheimer’s disease both increase in prevalence with age. The former is a risk factor for the latter, but a mechanistic linkage between them remains elusive. We show that prediabetic serum hyperinsulinemia is reflected in the cerebrospinal fluid and that this chronically elevated insulin renders neurons resistant to insulin. This leads to abnormal electrophysiological activity and other defects. In addition, neuronal insulin resistance reduces hexokinase 2, thus impairing glycolysis. This hampers the ubiquitination and degradation of p35, favoring its cleavage to p25, which hyperactivates CDK5 and interferes with the GSK3β-induced degradation of β-catenin. CDK5 contributes to neuronal cell death while β-catenin enters the neuronal nucleus and re-activates the cell cycle machinery. Unable to successfully divide, the neuron instead enters a senescent-like state. These findings offer a direct connection between peripheral hyperinsulinemia, as found in prediabetes, age-related neurodegeneration and cognitive decline. The implications for neurodegenerative conditions such as Alzheimer’s disease are described.