States of increased metabolic demand such as fasting modulate hypothalamic neuropeptide gene expression and decrease circulating leptin levels. This study tested the hypotheses that fasting stimulates gene induction mediated by cAMP response element (CRE)-dependent increases in gene transcription and that fasting-induced decreases in leptin can regulate this CRE-mediated gene induction. Using C57BL/6J mice transgenic for a CRE-lacZ construct, an immunocytochemical study showed that fasting activated reporter gene expression in the hypothalamic arcuate nucleus (Arc) in a small subset of neurons and increased phosphorylation of CRE binding protein. The increase of beta-galactosidase expression caused by fasting was inhibited by a protein kinase A inhibitor, Rp-8-Br-cAMPS, when the compound was microinjected into the medial basal hypothalamus, and enhanced by intraperitoneal injection of selective phosphodiesterase inhibitors. In situ hybridization studies showed that neuropeptide Y (NPY) mRNA levels increased in the Arc during fasting, whereas proopiomelanocortin (POMC) mRNA levels decreased. Double labeling of mRNA and beta-galactosidase immunoreactivity in the fasted brain indicated that the subpopulation of the neurons expressing beta-galactosidase all produced NPY but not POMC. To study the possible involvement of decreased circulating leptin during starvation on CRE-mediated gene induction, leptin was administered intraperitoneally to fasted mice. Leptin significantly attenuated both beta-galactosidase expression and NPY gene expression stimulated by fasting, suggesting that leptin inhibits fasting-stimulated NPY gene expression at least in part through downregulation of CRE-mediated gene induction in the Arc. Leptin-induced modification of CRE-mediated gene induction in the Arc may play an essential role in the central regulation of feeding behavior and energy expenditure.