Sequence variants in the first intron of FTO are strongly associated with human obesity and human carriers of the risk alleles show evidence for increased appetite and food intake. Mice globally lacking Fto display a complex phenotype characterised by both increased energy expenditure and increased food intake. The site of action of FTO on energy balance is unclear. Fasting reduces levels of Fto mRNA in the arcuate nucleus (ARC) of the hypothalamus, a site where Fto expression is particularly high. In this study, we have extended this nutritional link by demonstrating that consumption of a high fat diet (45%) results in a 2.5 fold increase in Arc Fto expression. We have further explored the role of hypothalamic Fto in the control of food intake by using stereotactic injections coupled with AAV technology to bi-directionally modulate Fto expression. An over expression of Fto protein by 2.5-fold in the ARC results in a 14% decrease in average daily food intake in the first week. In contrast, knocking down Arc Fto expression by 40% increases food intake by 16%. mRNA levels of Agrp, Pomc and Npy, ARC-expressed genes classically associated with the control of food intake, were not affected by the manipulation of Fto expression. However, over expression of Fto resulted in a 4-fold increase in the mRNA levels of Stat3, a signalling molecule critical for leptin receptor signalling, suggesting a possible candidate for the mediation of Fto's actions. These data provide further support for the notion that FTO itself can influence key components of energy balance, and is therefore a strong candidate for the mediation of the robust association between FTO intronic variants and adiposity. Importantly, this provide the first indication that selective alteration of FTO levels in the hypothalamus can influence food intake, a finding consistent with the reported effects of FTO alleles on appetite and food intake in man.