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Human Islet amyloid polypeptide (hIAPP) from pancreatic β cells in the islet of Langerhans has different physiological functions including inhibiting the release of insulin and glucagon. Type 2 diabetes mellitus (T2DM) is an endocrine disorder due to relative insulin insufficiency and insulin resistance (IR) is associated with increased circulating hIAPP. Remarkably, hIAPP has structural similarity with amyloid beta (Aβ) and can engage in the pathogenesis of T2DM and Alzheimer’s disease (AD). Therefore, the present review aimed to elucidate how hIAPP acts as a link between T2DM and AD. IR, aging and low β cell mass increase expression of hIAPP which binds cell membrane leading to the aberrant release of Ca2+ and activation of the proteolytic enzymes leading to a series of events causing loss of β cells. Peripheral hIAPP plays a major role in the pathogenesis of AD, and high circulating hIAPP level increase AD risk in T2DM patients. However, there is no hard evidence for the role of brain-derived hIAPP in the pathogenesis of AD. Nevertheless, oxidative stress, mitochondrial dysfunction, chaperon-mediated autophagy, heparan sulfate proteoglycan (HSPG), immune response, and zinc homeostasis in T2DM could be the possible mechanisms for the induction of the aggregation of hIAPP which increase AD risk. In conclusion, increasing hIAPP circulating levels in T2DM patients predispose them to the development and progression of AD. Dipeptidyl peptidase 4 (DPP4) inhibitors and glucagon-like peptide-1 (GLP-1) agonists attenuate AD in T2DM by inhibiting expression and deposition of hIAP.