Historically, insulin is best known for its role in peripheral glucose homeostasis, and insulin signaling in the brain has received less attention. Insulin-independent brain glucose uptake has been the main reason for considering the brain as an insulin-insensitive organ. However, recent findings showing a high concentration of insulin in brain extracts, and expression of insulin receptors (IRs) in central nervous system tissues have gathered considerable attention over the sources, localization, and functions of insulin in the brain. This review summarizes the current status of knowledge of the peripheral and central sources of insulin in the brain, site-specific expression of IRs, and also neurophysiological functions of insulin including the regulation of food intake, weight control, reproduction, and cognition and memory formation. This review also considers the neuromodulatory and neurotrophic effects of insulin, resulting in proliferation, differentiation, and neurite outgrowth, introducing insulin as an attractive tool for neuroprotection against apoptosis, oxidative stress, beta amyloid toxicity, and brain ischemia.