Glucocorticoids have a bimodal effect on cognition, hippocampal pyramidal neurons and long-term potentiation (LTP). Transient increases in glucocorticoids improve performance at spatial memory tasks and facilitate synaptic efficacy, depending on the context. On the other hand, long-term elevations of glucocorticoids are associated with decreased cognitive performance, attenuated synaptic efficacy and neuronal atrophy. Elevation of glucocorticoids during aging is also associated with mild cognitive impairment and hippocampal atrophy. Caloric restriction (CR), a dietary manipulation which extends life-span in rodents, also increases free plasma corticosterone. Recent data suggests that CR attenuates many brain aging changes and increases resistance of neurons to toxins and injury. Thus, a paradox may be considered: if CR causes chronic elevation of glucocorticoids, and if glucocorticoids can increase the risk of neurodegeneration, how can CR be neuroprotective. We suggest that the neuroprotective effects of CR outweigh the deleterious effects of glucocorticoids. The neuroprotective effects of CR that are discussed here include decreased plasma glucose, attenuated free radical generation, alterations of the vasculature, increased expression of heat shock proteins and neurotrophic factors, and attenuation of age-related glial activation.