Patients with type 2 diabetes exhibit severe impairments in insulin signalling in the brain and are five times more likely to develop Alzheimer’s disease. However, what leads to these impairments is not fully understood. Here, we show reduced expression of endothelial cell caveolin-1 (Cav-1) in the db/db (Leprdb) mouse model of type 2 diabetes. This reduction correlated with alterations in insulin receptor expression and signalling in brain microvessels as well as brain parenchyma. These findings were recapitulated in the brains of endothelial cell-specific Cav-1 knock-out (Tie2Cre; Cav-1fl/fl) mice. Lack of Cav-1 in endothelial cells led to reduced response to insulin as well as reduced insulin uptake. Furthermore, we observed that Cav-1 was necessary for the stabilization of insulin receptors in lipid rafts. Interactome analysis revealed that insulin receptor interacts with Cav-1 and caveolae-associated proteins, insulin-degrading enzyme and the tight junction protein Zonula Occludence-1 in brain endothelial cells. Restoration of Cav-1 in Cav-1 knock-out brain endothelial cells rescued insulin receptor expression and localization. Overall, these results suggest that Cav-1 regulates insulin signalling and uptake by brain endothelial cells by modulating IR-α and IR-β localization and function in lipid rafts. Furthermore, depletion of endothelial cell-specific Cav-1 and the resulting impairment in insulin transport leads to alteration in insulin signalling in the brain parenchyma of type 2 diabetics.