Recent observations have established that interruption of insulin production causes deficits in learning and memory formation. We have studied the mechanism of insulin's neuroprotective effect on primary neuronal cells and in streptozotocin (STZ)-induced diabetic rat brain. We have found that in hippocampal neuronal cells insulin increases the content of farnesylated Ras and phosphorylated form of Akt. Besides, the treatment of cells by insulin leads to the activation of mitochondrial cytochrome oxidase, which is inhibited by manumycin, a farnesyltransferase inhibitor. During experimental diabetes, the content of membrane-bound GRF1 was decreased in rat hippocampus that was correlated with the reduction in mitochondrial Ras and phosphorylated forms of Akt. This redistribution in Ras-GRF system was accompanied by the alteration in the activities of CREB, NF-kB (p65) and c-Rel transcription factors. We have proposed that hypoinsulinemia induces the inhibition of Ras signalling in the neuronal cells additionally by abnormality of Ras trafficking into mitochondria.