Leptin is an adipose tissue-derived secretory hormone that suppresses appetite by inhibition of neuropepeptide Y (NPY) gene expression in arcuate nucleus (ARC) in the hypothalamus. To investigate the transcriptional regulation of NPY gene by leptin, we carried out a luciferase assay using NPY gene promotor plasmid (NPY-luc) in NPY expressing cells such as N18TG2, NG108-15, and PC12 cells. In these cells, the NPY gene was transactivated by leptin through activation of leptin receptor. Leptin-induced transactivation was mediated through the 221-bp region of the NPY gene promotor, which possesses two putative STAT3 binding sites. To investigate the mechanism of in vivo suppression of NPY gene transcription in ARC by leptin, the effect of SOCS members on the leptin-induced transactivation of NPY gene was studied. In vivo SOCS2 and SOCS3 mRNAs were induced in mouse hypothalamus by leptin. Although leptin (125 ng/ml) induced significant increase in NPY gene transcriptional activity in mock-transfected cells, the leptin-induced NPY gene transcriptional activity was completely abolished in SOCS3-transfected cells. SOCS3 also suppressed the basal NPY gene transcription. These finding suggested that leptin inhibits NPY gene transcription in the hypothalamus in vivo and SOCS3 is a negative regulator of the NPY gene.