Primary diabetic encephalopathy is a recently recognized late complication of diabetes resulting in a progressive decline in cognitive faculties. In the spontaneously type 1 diabetic BB/Wor rat, we recently demonstrated that cognitive impairment was associated with hippocampal apoptotic neuronal loss. Here, we demonstrate that replacement of proinsulin C-peptide in this insulinopenic model significantly prevented spatial learning and memory deficits and hippocampal neuronal loss. C-peptide replacement prevented oxidative stress-, endoplasmic reticulum-, nerve growth factor receptor p75-, and poly(ADP-ribose) polymerase-related apoptotic activities. It partially ameliorated apoptotic stresses mediated via impaired insulin and IGF activities. These findings were associated with the prevention of increased expression of Bax and active caspase 3 and the frequency of caspase 3-positive neurons. The results show that several partially interrelated apoptotic mechanisms are involved in primary encephalopathy and suggest that impaired insulinomimetic action by C-peptide plays a prominent role in cognitive dysfunction and hippocampal apoptosis in type 1 diabetes. Although these abnormalities were not fully prevented by C-peptide replacement, the findings suggest that this regime will substantially prevent cognitive decline in the type 1 diabetic population.