Adipose tissue performs complex metabolic and endocrine functions. Among the endocrine products produced by adipose tissue are tumour necrosis factor alpha, interleukin 6, acylation-stimulating protein and leptin. The present review will focus primarily on mechanisms regulating leptin production and leptin action, and the implications of this regulation in the control of energy balance. Leptin acts in the central nervous system where it interacts with a number of hypothalamic neuropeptide systems to regulate feeding behaviour and energy expenditure. The presence of extreme obesity in animals and human subjects with mutations of the leptin gene or the leptin receptor demonstrates that normal leptin production and action are critical for maintaining energy balance. Insulin is the major regulator of leptin production by adipose tissue. Insulin infusions increase circulating leptin concentrations in human subjects. Plasma leptin levels are markedly decreased in insulin-deficient diabetic rodents, and the low leptin levels contribute to diabetic hyperphagia. Based on in vitro studies, the effect of insulin to stimulate leptin production appears to involve increased glucose metabolism. Blockade of glucose transport or glycolysis inhibits leptin expression and secretion in isolated adipocytes. Evidence suggests that anaerobic metabolism of glucose to lactate does not stimulate leptin production. Alterations in insulin-mediated glucose metabolism in adipose tissue are likely to mediate the effects of energy restriction to decrease, and refeeding to increase, circulating leptin levels. Changes in glucose metabolism may also explain the observation that high-fat meals lower 24h circulating leptin levels relative to high-carbohydrate meals in human subjects, suggesting a mechanism that may contribute to the effects that high-fat diets have in promoting increased energy intake, weight gain and obesity. The decreased circulating leptin observed during energy restriction is related to increased sensations of hunger in human subjects. Thus, decreases in leptin during energy-restricted weight-loss regimens may contribute to the strong propensity for weight regain. A better understanding of the precise mechanisms regulating leptin production and leptin action may lead to new approaches for managing obesity.