Chronic stress is associated with impaired neuronal functioning, altered insulin signaling, and behavioral dysfunction. Quercetin has shown neuroprotective and antidiabetic effects, besides modulating cognition and insulin signaling. Therefore, in the present study, we explored whether or not quercetin ameliorates stress-mediated cognitive dysfunction and explored the underlying mechanism. Swiss albino male mice were subjected to an array of unpredicted stressors for 21 days, during which 30 mg/kg quercetin treatment was given orally. The effect of chronic unpredicted stress (CUS) and quercetin treatment on cognition were evaluated using novel object recognition (NOR) and Morris water maze (MWM) tests. Hippocampal neuronal integrity was observed by histopathological examination. Blood glucose, serum corticosterone, and insulin levels were measured by commercial kits and insulin resistance was evaluated in terms of HOMA-IR index. Hippocampal insulin signaling was determined by immunofluorescence staining. CUS induced significant cognitive dysfunction (NOR and MWM) and severely damaged hippocampal neurons, especially in the CA3 region. Quercetin treatment alleviated memory dysfunction and rescued neurons from CUS-mediated damage. Fasting blood glucose, serum corticosterone, and serum insulin were significantly elevated in stressed animals, besides, having significantly higher HOMA-IR index, suggesting the development of insulin resistance. Quercetin treatment alleviated insulin resistance and attenuated altered biochemical parameters. CUS markedly down-regulated insulin signaling in CA3 region and quercetin treatment improved neuronal GLUT4 expression, which seemed to be independent of insulin and insulin receptor levels. These results suggest that intact insulin functioning in the hippocampus is essential for cognitive functions and quercetin improves CUS-mediated cognitive dysfunction by modulating hippocampal insulin signaling.