Clinical studies have indicated that diabetes is associated with Alzheimer's disease (AD) and neurodegeneration. However, the mechanisms underlying this association have not been fully elucidated. Diabetes causes neurodegeneration by inducing changes in vascular function and structure, glucose metabolism, and insulin signaling, as well as by modifying β–amyloid (Aβ)/tau metabolisms. In turn, AD influences systemic glucose metabolism by inducing behavioral changes, memory disturbances, hypothalamic dysfunction, frailty and possibly plasma/peripheral Aβ level changes. Hypoglycemia, one of the major conditions encountered during the treatment of patients with diabetes, may also contribute to neurodegeneration. Through this vicious circle, diabetes and AD may cooperate to cause neurodegeneration. Various molecular, cellular, inter-organ, physical and clinical factors might contribute to the bidirectional interactions between diabetes and AD. Explorations of a key factor that underlies the bidirectional interactions, “Factor X”, could lead to the development of a potential therapeutic target for neurodegeneration. Factor X should fulfill the following equation: neurodegeneration equals Aβ levels multiplied by Factor X.