Alzheimer's disease (AD) and type 2 diabetes appear to share similar pathogenic mechanisms. dsRNA-dependent protein kinase (PKR) underlies peripheral insulin resistance in metabolic disorders. PKR phosphorylates eukaryotic translation initiation factor 2α (eIF2α-P), and AD brains exhibit elevated phospho-PKR and eIF2α-P levels. Whether and how PKR and eIF2α-P participate in defective brain insulin signaling and cognitive impairment in AD are unknown. We report that β-amyloid oligomers, AD-associated toxins, activate PKR in a tumor necrosis factor α (TNF-α)-dependent manner, resulting in eIF2α-P, neuronal insulin receptor substrate (IRS-1) inhibition, synapse loss, and memory impairment. Brain phospho-PKR and eIF2α-P were elevated in AD animal models, including monkeys given intracerebroventricular oligomer infusions. Oligomers failed to trigger eIF2α-P and cognitive impairment in PKR(-/-) and TNFR1(-/-) mice. Bolstering insulin signaling rescued phospho-PKR and eIF2α-P. Results reveal pathogenic mechanisms shared by AD and diabetes and establish that proinflammatory signaling mediates oligomer-induced IRS-1 inhibition and PKR-dependent synapse and memory loss.