Type 2 Diabetes (T2D) is characterized by the toxic aggregation of human islet amyloid polypeptide (hIAPP or amylin) within pancreatic β-cells. IAPP is also a neuropancreatic hormone that plays a significant role in Alzheimer’s disease (AD) by co-depositing with amyloid-beta (Aβ) and Tau, supporting the Type 3 Diabetes (T3D) hypothesis. Soluble IAPP accelerates Aβ aggregation through cross-seeding and causes neurotoxicity by impairing the blood-brain barrier and activating neuroinflammation. Melatonin inhibits these processes by disrupting hydrophobic interactions in both hIAPP and Aβ, preventing the formation of toxic β-sheet structures. Furthermore, melatonin promotes amyloid clearance via the glymphatic and lymphatic systems, protects neurons from oxidative damage, and reduces Tau hyperphosphorylation. This suggests that melatonin serves as a promising multitarget therapeutic agent for both metabolic and neurodegenerative disorders by modulating structural protein transformations.