Despite high leptin levels, most obese humans and rodents lack responsiveness to its appetite-suppressing effects. We demonstrate that leptin modulates NPY/AgRP and alpha-MSH secretion from the ARH of lean mice. High-fat diet-induced obese (DIO) mice have normal ObRb levels and increased SOCS-3 levels, but leptin fails to modulate peptide secretion and any element of the leptin signaling cascade. Despite this leptin resistance, the melanocortin system downstream of the ARH in DIO mice is over-responsive to melanocortin agonists, probably due to upregulation of MC4R. Lastly, we show that by decreasing the fat content of the mouse's diet, leptin responsiveness of NPY/AgRP and POMC neurons recovered simultaneously, with mice regaining normal leptin sensitivity and glycemic control. These results highlight the physiological importance of leptin sensing in the melanocortin circuits and show that their loss of leptin sensing likely contributes to the pathology of leptin resistance.