Some forms of obesity and diabetes may develop because of inappropriate hypothalamic function. Evidence for this hypothesis is presented here. The data suggest that a deficiency of growth hormone and an increase in insulin secretion results in excessive lipid accumulation and obesity. Hypothalamic involvement in the control of these two hormones has been well established. A role for growth hormone in the development of some forms of diabetes is also presented. Normally, high blood glucose suppresses growth hormone release. This suppression should result in an increase of insulin sensitivity and improve plasma glucose control. When there is inappropriate hypothalamic suppression of growth hormone, the anti-insulin activity of growth hormone acts to raise plasma glucose levels even higher. This may be why some forms of obesity precipitate the diabetic state and others do not.