The administration of leptin to leptin-deficient humans, and the analogous Lep^ob/Lep^ob mice, effectively reduces hyperphagia and obesity^,. But common obesity is associated with elevated leptin, which suggests that obese humans are resistant to this adipocyte hormone. In addition to regulating long-term energy balance, leptin also rapidly affects neuronal activity^,,. Proopiomelanocortin (POMC) and neuropeptide-Y types of neurons in the arcuate nucleus of the hypothalamus are both principal sites of leptin receptor expression and the source of potent neuropeptide modulators, melanocortins and neuropeptide Y, which exert opposing effects on feeding and metabolism^,. These neurons are therefore ideal for characterizing leptin action and the mechanism of leptin resistance; however, their diffuse distribution makes them difficult to study. Here we report electrophysiological recordings on POMC neurons, which we identified by targeted expression of green fluorescent protein in transgenic mice. Leptin increases the frequency of action potentials in the anorexigenic POMC neurons by two mechanisms: depolarization through a nonspecific cation channel; and reduced inhibition by local orexigenic neuropeptide-Y/GABA (γ-aminobutyric acid) neurons. Furthermore, we show that melanocortin peptides have an autoinhibitory effect on this circuit. On the basis of our results, we propose an integrated model of leptin action and neuronal architecture in the arcuate nucleus of the hypothalamus.