Leptin elicits a metabolic response that cannot be explained by its anorectic effects alone. To examine the mechanism underlying leptin's metabolic actions, we used transcription profiling to identify leptin-regulated genes in ob/ob liver. Leptin was found to specifically repress RNA levels and enzymatic activity of hepatic stearoyl-CoA desaturase-1 (SCD-1), which catalyzes the biosynthesis of monounsaturated fatty acids. Mice lacking SCD-1 were lean and hypermetabolic. ob/ob mice with mutations in SCD-1 were significantly less obese than ob/ob controls and had markedly increased energy expenditure. ob/ob mice with mutations in SCD-1 had histologically normal livers with significantly reduced triglyceride storage and VLDL (very low density lipoprotein) production. These findings suggest that down-regulation of SCD-1 is an important component of leptin's metabolic actions.