The brain keenly depends on glucose for energy, and mammalians have redundant systems to control glucose production. An increase in circulating glucose inhibits glucose production in the liver, but this negative feedback is impaired in type 2 diabetes. Here we report that a primary increase in hypothalamic glucose levels lowers blood glucose through inhibition of glucose production in rats. The effect of glucose requires its conversion to lactate followed by stimulation of pyruvate metabolism, which leads to activation of adenosine triphosphate (ATP)–sensitive potassium channels. Thus, interventions designed to enhance the hypothalamic sensing of glucose may improve glucose homeostasis in diabetes.