Hypothalamic proopiomelanocortin (POMC) gene expression is reduced in many forms of obesity and diabetes, particularly in those attributable to deficiencies in leptin or its receptor. To assess the functional significance of POMC in mediating metabolic phenotypes associated with leptin deficiency, leptin-deficient mice bearing a transgene expressing the POMC gene under control of the neuron-specific enolase promoter were produced. The POMC transgene attenuated fasting-induced hyperphagia in wild-type mice. Furthermore, the POMC transgene partially reversed obesity, hyperphagia, and hypothermia and effectively normalized hyperglycemia, glucosuria, glucose intolerance, and insulin resistance in leptin-deficient mice. Effects of the POMC transgene on glucose homeostasis were independent of the partial correction of hyperphagia and obesity. Furthermore, the POMC transgene normalized the profile of hepatic and adipose gene expression associated with gluconeogenesis, glucose output, and insulin sensitivity. These results indicate that central POMC is a key modulator of glucose homeostasis and that agonists of POMC products may provide effective therapy in treating impairments in glucose homeostasis when hypothalamic POMC expression is reduced, as occurs with leptin deficiency, hypothalamic damage, and aging.