Type 2 diabetes increases the risk for dementia, including Alzheimer’s disease (AD). Pioglitazone (Pio), a pharmacological agonist of the peroxisome proliferator-activated receptor γ (PPARγ), improves insulin sensitivity and has been suggested to have potential in the management of AD symptoms, albeit through mostly unknown mechanisms. We here investigated the potential of Pio to counter synaptic malfunction and loss, a characteristic of AD pathology and its accompanying cognitive deficits. Results from experiments on primary mouse neuronal cultures and a human neural cell line (SH-SY5Y) show that Pio treatment attenuates amyloid β (Aβ)-triggered the pathological (mis-) processing of amyloid precursor protein (APP) and inhibits Aβ-induced accumulation and hyperphosphorylation of Tau. These events are accompanied by increased glutamatergic receptor 2B subunit (GluN2B) levels that are causally linked with neuronal death. Further, Pio treatment blocks Aβ-triggered missorting of hyperphosphorylated Tau to synapses and the subsequent loss of PSD95-positive synapses. These latter effects of Pio are PPARγ-mediated since they are blocked in the presence of GW9662, a selective PPARγ inhibitor. Collectively, these data show that activated PPARγ buffer neurons against APP misprocessing, Tau hyperphosphorylation and its missorting to synapses and subsequently, synaptic loss. These first insights into the mechanisms through which PPARγ influences synaptic loss make a case for further exploration of the potential usefulness of PPARγ agonists in the prevention and treatment of synaptic pathology in AD.