Hypothalamic inflammation is present in animal models of obesity, and the intracerebroventricular injection of TNFα can reproduce a number of features of the hypothalamus of obese animals. Because obesity is a risk factor for type 2 diabetes (DM2) we hypothesized that, by inducing hypothalamic inflammation, we could reproduce some clinical features of DM2. Lean Wistar rats and TNF receptor 1-knockout mice were employed to determine the effects of hypothalamic actions of TNFα on thermogenesis and metabolic parameters. Signal transduction and protein expression were evaluated by immunoblot and real-time PCR. Thermogenesis was evaluated in living rats, and respirometry was determined in isolated muscle fiber. In Wistar rats, hypothalamic TNFα blunts the anorexigenic effect of leptin, which is accompanied by reduced leptin signaling and increased expression of suppressor of cytokine signaling 3. In addition, hypothalamic TNFα reduces O₂ consumption and the expression of thermogenic proteins in brown adipose tissue and skeletal muscle. Furthermore, hypothalamic inflammation increases base-line plasma insulin and insulin secretion by isolated pancreatic islets, which is accompanied by an impaired insulin signal transduction in liver and skeletal muscle. Hypothalamic inflammation induced by stearic acid also reduces O₂ consumption and blunts peripheral insulin signal transduction. The use of intracerebroventricular infliximab restores O₂ consumption in obese rats, whereas TNF receptor 1-knockout mice are protected from diet-induced reduced thermogenesis and defective insulin signal transduction. Thus, low-grade inflammation of the hypothalamus is sufficient to induce changes in a number of parameters commonly impaired in obesity and DM2, and TNFα is an important mediator of this process.