Recent epidemiological evidence reveals that patients suffering from type 2 diabetes mellitus (T2DM) often experience a significant decline in cognitive function, and approximately 70% of those cases eventually develop Alzheimer’s disease (AD). Although several pathological processes are shared by AD and T2DM, the exact molecular mechanisms connecting these two diseases are poorly understood. Aggregation of human islet amyloid polypeptide (hIAPP), the pathological hallmark of T2DM, has also been detected in brain tissue and is associated with cognitive decline and AD development. In addition, hIAPP and amyloid β protein (Aβ) share many biophysical and physiological properties as well as exert similar cytotoxic mechanisms. Therefore, it is important to examine the possible role of hIAPP in the pathogenesis of AD. In this article, we introduce the basics on this amyloidogenic protein. More importantly, we discuss the potential mechanisms of hIAPP-induced AD development, which will be beneficial for proposing novel and feasible strategies to optimize AD prevention and/or treatment in diabetics.