The hypothalamus plays a central role in monitoring and regulating systemic glucose metabolism. The brain is enriched with phospholipids containing poly-unsaturated fatty acids, which are biologically active in physiological regulation. Here, we show that intraperitoneal glucose injection induces changes in hypothalamic distribution and amounts of phospholipids, especially arachidonic-acid-containing phospholipids, that are then metabolized to produce prostaglandins. Knockdown of cytosolic phospholipase A2 (cPLA2), a key enzyme for generating arachidonic acid from phospholipids, in the hypothalamic ventromedial nucleus (VMH), lowers insulin sensitivity in muscles during regular chow diet (RCD) feeding. Conversely, the down-regulation of glucose metabolism by high fat diet (HFD) feeding is improved by knockdown of cPLA2 in the VMH through changing hepatic insulin sensitivity and hypothalamic inflammation. Our data suggest that cPLA2-mediated hypothalamic phospholipid metabolism is critical for controlling systemic glucose metabolism during RCD, while continuous activation of the same pathway to produce prostaglandins during HFD deteriorates glucose metabolism.