Obesity, type 2 diabetes mellitus (T2DM), and non-alcoholic steatohepatitis (NASH) are associated with cognitive impairment, brain insulin resistance, and neurodegeneration. Recent studies linked these effects to increased pro-ceramide gene expression in liver and increased ceramide levels in serum. Since ceramides are neurotoxic and cause insulin resistance, we directly examined the role of ceramides as mediators of impaired signaling and central nervous system function using an in vivo model. Long Evans rat pups were administered C2Cer:N-acetylsphinganine or its inactive dihydroceramide analog (C2DCer) by i.p. injection. Rats were subjected to rotarod and Morris water maze tests of motor and cognitive function, and livers and brains were examined for histopathology and integrity of insulin/IGF signaling. C2Cer treatment caused hyperglycemia, hyperlipidemia, and mild steatohepatitis, reduced brain lipid content, and increased ceramide levels in liver, brain, and serum. Quantitative RT-PCR analysis revealed significant alterations in expression of several genes needed for insulin and IGF-I signaling, and multiplex ELISAs demonstrated inhibition of signaling through the insulin or IGF-1 receptors, IRS-1, and Akt in both liver and brain. Ultimately, the toxic ceramides generated in peripheral sources such as liver or adipose tissue caused sustained impairments in neuro-cognitive function and insulin/IGF signaling needed for neuronal survival, plasticity, and myelin maintenance in the brain. These findings support our hypothesis that a liver/peripheral tissue-brain axis of neurodegeneration, effectuated by increased toxic lipid/ceramide production and transport across the blood-brain barrier, could mediate cognitive impairment in T2DM and NASH.