The enzyme carnitine palmitoyltransferase-1 (CPT1) regulates long-chain fatty acid (LCFA) entry into mitochondria, where the LCFAs undergo beta-oxidation. To investigate the mechanism(s) by which central metabolism of lipids can modulate energy balance, we selectively reduced lipid oxidation in the hypothalamus. We decreased the activity of CPT1 by administering to rats a ribozyme-containing plasmid designed specifically to decrease the expression of this enzyme or by infusing pharmacological inhibitors of its activity into the third cerebral ventricle. Either genetic or biochemical inhibition of hypothalamic CPT1 activity was sufficient to substantially diminish food intake and endogenous glucose production. These results indicated that changes in the rate of lipid oxidation in selective hypothalamic neurons signaled nutrient availability to the hypothalamus, which in turn modulated the exogenous and endogenous inputs of nutrients into the circulation.