Insulin is a peptide hormone involved in the regulation of glucose homeostasis. Its synthesis and function in the peripheral tissues have been extensively studied and well understood. In contrast, demonstration of insulin in the brain has raised questions concerning its origin and physiological significance. In spite of extensive studies, the source of insulin present in the brain has not yet been conclusively identified. Evidence exists in support of both peripheral and central origins of this hormone in the brain. Recognized physiological effects of insulin in the central nervous system (CNS) include regulation of food intake, control of glucose uptake and trophic actions on neuronal and glial cells. These actions of insulin are mediated by insulin receptor resembling closely that in peripheral tissues and coupled with tyrosine kinase signal transduction pathway. In this review we will discuss theories concerning the origin of insulin in the CNS. In addition, we will present current information on both cellular and physiological effects of this hormone in the brain.