Obesity and diabetes, termed “diabesity,” are serious health problems that are increasing in frequency. However, the molecular mechanisms and neuronal regulation of these metabolic disorders are not fully understood. We show here that Shp2, a widely expressed Src homology 2-containing Tyr phosphatase, plays a critical role in the adult brain to control food intake, energy balance, and metabolism. Mice with a neuron-specific, conditional Shp2 deletion were generated by crossing a pan-neuronal Cre-line (CRE3) with Shp2^flox/flox mice. These congenic mice, CRE3/Shp2-KO, developed obesity and diabetes and the associated pathophysiological complications that resemble those encountered in humans, including hyperglycemia, hyperinsulinemia, hyperleptinemia, insulin and leptin resistance, vasculitis, diabetic nephropathy, urinary bladder infections, prostatitis, gastric paresis, and impaired spermatogenesis. This mouse model may help to elucidate the molecular mechanisms that lead to the development of diabesity in humans and provide a tool to study the in vivo complications of uncontrolled diabetes.