Hypothalamic neural circuits are known to regulate energy homeostasis and feeding behavior, but how these circuits are established during development is not well understood. Here we report that embryonic neural progenitors that express the transcription factor OLIG1 contribute neurons to the ventral hypothalamus including the arcuate nucleus (ARH), a center that regulates feeding behavior. Ablation of bone morphogenetic protein receptor 1a (BMPR1A) in the OLIG1 lineage resulted in hypophagia, hypoglycemia, and weight loss after the second postnatal week with death by week 4. Differentiation and specification of inhibitory hypothalamic neurons contributing to melanocortin and dopaminergic systems were abnormal in the BMPR1A-deficient ARH. Although the hypophagia promoted expression of the orexigenic neuropeptide agouti related protein (AgRP) in the BMPR1A-deficient ARH, there was a profound decrease of AgRP(+) axonal terminals in the mutant ARH targets including dorsomedial and paraventricular hypothalamic nuclei. Projection of AgRP(+) neurons to these nuclei is known to be regulated by leptin. Leptin injection in neonatal mice increased bone morphogenic protein (BMP) signaling in the ventral hypothalamus, and blocking BMP signaling prevented leptin-induced neurite outgrowth in ARH explant cultures. These findings suggest that BMPR1A signaling is critical for postnatal establishment of leptin-responsive orexigenic fibers from ARH to multiple hypothalamic nuclei. More generally these observations indicate that BMPR1A signaling regulates postnatal establishment of OLIG1 lineage-derived ARH neuronal circuits that are critical for leptin-mediated feeding behavior.