Insulin action on hippocampus improves cognitive function and obesity and type 2 diabetes are associated with decreased cognitive function. Cerebral microvasculature plays a critical role in maintaining cerebral vitality and function by supplying nutrients, oxygen and hormones such as insulin to cerebral parenchyma including hippocampus. In skeletal muscle insulin actively regulates microvascular opening and closure and this action is impaired in the insulin resistant states. To examine insulin's action on hippocampal microvasculature and parenchyma and the impact of diet-induced obesity we determined cognitive function, and microvascular insulin responses, parenchyma insulin responses and capillary density in the hippocampus in 2-month and 8-month rats on chow diet and 8-month rats on long-term high-fat diet (6 months). Insulin infusion increased hippocampal microvascular perfusion in rats on chow diet by ~80-90%. High-fat diet feeding completely abolished insulin-mediated microvascular responses and protein kinase B phosphorylation but did not alter the capillary density in the hippocampus. This was associated with a significantly decreased cognitive function assessed using both the two-trial spontaneous alternation behavior test and the novel object recognition test. As the microvasculature provides the needed endothelial surface area for delivery of nutrients, oxygen and insulin to hippocampal parenchyma, we conclude that hippocampal microvascular insulin resistance may play a critical role in the development of cognitive impairment seen in obesity and diabetes. Our results suggest that improvement in hippocampal microvascular insulin sensitivity might help improve or reverse cognitive function in the insulin resistant states.