Except for few symptoms-improved drugs for Alzheimer's disease (AD), no disease-modified drug has been developed, especially for AD in type 2 diabetes mellitus (T2DM). SCR-1693, a disease-mortified candidate for AD, which is now in Phase I clinical study in China, improves Aβ₂₅–₃₅-impaired cognitive function in rodent's models. Here we report the effect of SCR-1693 on regulation of tau phosphorylation and insulin resistance associated cognition, and illustrate its underlying mechanism. We found that in intracerebroventricular injection of streptozotcin (STZ) rats, oral administration of SCR-1693 dose-dependently improved the learning and memory in Morris water maze test, decreased tau hyperphosphorylation, astrogliosis and postsynaptic protein loss in hippocampus. In Neura-2a cells with stable transfection of full-length human tau (Neura-2a-tau), treatment of SCR-1693 concentration-dependently enhanced the activation of protein phosphatase (PP1) and protein phosphatase 2A (PP2A), decreased cellular tau phosphorylation, and increased insulin-induced cellular signaling to reverse insulin resistance. Pre-treatment with the inhibitor of PP1 and PP2A inhibited the effect of SCR-1693 on both of tau phosphorylation and insulin signaling in Neura-2a-tau cells. All data suggest that an increase of activity of tau phosphatase was involved in the mechanism of SCR-1693 on the regulation of tau phosphorylation and insulin signaling, and SCR-1693 is considerable candidate for insulin resistance associated sporadic AD.