Type 2 diabetes (T2D) is a high-risk factor for Alzheimer's disease (AD) due to impaired insulin signaling pathway in brain. Capsaicin is a specific transient receptor potential vanilloid 1 (TRPV1) agonist which was proved to ameliorate insulin resistance. In this study, we investigated whether dietary capsaicin could reduce the risk of AD in T2D. T2D rats were fed with capsaicin-containing high fat (HF) diet for 10 consecutive days (T2D+CAP). Pair-fed T2D rats (T2D+PF) fed with the HF-diet of average dose of T2D+CAP group were included to control for the effects of reduced food intake and body weight. Capsaicin-containing standard chow was also introduced to non-diabetic rats (NC+CAP). Blood glucose and insulin were monitored. The phosphorylation level of tau at individual sites, the activities of phosphatidylinositol 3 kinase/protein kinase B (PI3K/AKT) and glycogen synthase kinase-3β (GSK-3β) were analyzed by Western blots. The results revealed that the levels of phosphorylated tau protein at sites Ser199, Ser202 and Ser396 in hippocampus of T2D+CAP group were decreased significantly, but these phospho-sites in T2D+PF group didn't show such improvements compared with T2D group. There were almost no changes in non-diabetic rats on capsaicin diet (NC+CAP) compared with the non-diabetic rats with normal chow (NC). Increased activity of PI3K/AKT and decreased activity of GSK-3β were detected in hippocampus of T2D+CAP group compared with T2D group, and these changes did not show in T2D+PF group either. These results demonstrated that dietary capsaicin appears to prevent the hyperphosphorylation of AD-associated tau protein by increasing the activity of PI3K/AKT and inhibiting GSK-3β in hippocampus of T2D rats, which supported that dietary capsaicin might have a potential use for the prevention of AD in T2D.