Hyperphosphorylated tau is the major component of paired helical filaments in neurofibrillary lesions associated with Alzheimer's disease. Hyperphosphorylation reduces the affinity of tau for microtubules and is thought to be a critical event in the pathogenesis of this disease. Recently, glycogen-synthase kinase-3 has been shown to phosphorylate tau in vitro and in non-neuronal cells transfected with tau. The activity of glycogen-synthase kinase-3 can be down-regulated in response to insulin or insulin-like growth factor-1 through the activation of the phosphatidylinositol 3-kinase pathway. We therefore hypothesize that insulin or insulin-like growth factor-1 may affect tau phosphorylation through the inhibition of glycogen-synthase kinase-3 in neurons. Using cultured human neuronal NT2N cells, we demonstrate that glycogen-synthase kinase-3 phosphorylates tau and reduces its affinity for microtubules and that insulin and insulin-like growth factor-1 stimulation reduces tau phosphorylation and promotes tau binding to microtubules. We further demonstrate that these effects of insulin and insulin-like growth factor-1 are mediated through the inhibition of glycogen-synthase kinase-3 via the phosphatidylinositol 3-kinase/protein kinase B signaling pathway.