Despite the strong association between diabetes and dementia, it remains to be fully elucidated how insulin deficiency adversely affects brain functions. We show that insulin deficiency in streptozotocin-induced diabetic mice decreased mitochondrial ATP production and/or citrate synthase and cytochrome oxidase activities in the cerebrum, hypothalamus, and hippocampus. Concomitant decrease in mitochondrial fusion proteins and increased fission proteins in these brain regions likely contributed to altered mitochondrial function. Although insulin deficiency did not cause any detectable increase in reactive oxygen species (ROS) emission, inhibition of monocarboxylate transporters increased ROS emission and further reduced ATP production, indicating the causative roles of elevated ketones and lactate in counteracting oxidative stress and as a fuel source for ATP production during insulin deficiency. Moreover, in healthy mice, intranasal insulin administration increased mitochondrial ATP production, demonstrating a direct regulatory role of insulin on brain mitochondrial function. Proteomics analysis of the cerebrum showed that although insulin deficiency led to oxidative post-translational modification of several proteins that cause tau phosphorylation and neurofibrillary degeneration, insulin administration enhanced neuronal development and neurotransmission pathways. Together these results render support for the critical role of insulin to maintain brain mitochondrial homeostasis and provide mechanistic insight into the potential therapeutic benefits of intranasal insulin.