Leptin, a hormone secreted by adipocytes, regulates the size of the adipose tissue mass through effects on satiety and energy metabolism. Leptin's precise sites of action are not known. The leptin receptor (Ob-R) is found in many tissues in several alternatively spliced forms raising the possibility that leptin exerts effects on many tissues including the hypothalamus. Ob-R is a member of the gp130 family of cytokine receptors which are known to stimulate gene transcription via activation of cytosolic STAT proteins. In order to identify the sites of leptin action in vivo, we assayed for activation of STAT proteins in mice treated with leptin. The STAT proteins bind to phosphotyrosine residues in the cytoplasmic domain of the ligand-activated receptor where they are phosphorylated. The activated STAT proteins dimerize and translocate to the nucleus where they bind DNA and activate transcription. The activation of STAT proteins in response to leptin was assayed in a variety of mouse tissues known to express Ob-R. Leptin injection activated Stat3 but no other STAT protein in the hypothalamus of ob/ob and wild-type mice but not db/db mice, mutants that lack an isoform of the leptin receptor. Leptin did not induce STAT activation in any of the other tissues tested. Activation of Stat3 by leptin was dose dependent and first observed after 15 minutes and maximal at 30 minutes. Our data indicate the hypothalamus is a direct target of leptin action and that this activation is critically dependent on the gp-130-like leptin receptor isoform missing in C57BLKS/J db/db mice. This is the first in vivo demonstration of leptin signal transduction.