The hypothalamic melanocortin system represents the pivotal neural circuit in the central nervous system in the regulation of energy balance. Previous studies have reported its essential roles in the modulation of feeding behavior. Recent studies revealed the role and underlying mechanisms of this system in the regulation of glucose and lipid metabolism. Importantly, current evidence implied that melanocortin system, via sympathetic nervous system, enhances energy expenditure by promoting brown adipose tissue thermogenesis and browning/beige of white adipose tissues. In this review we will summarize recent discoveries on the hypothalamic melanocortin system and its associated neural circuit in the regulation of whole body energy homeostasis, we will also discuss the actions of current anti-obesity and anti-diabetes drugs in the central nervous system, in order to provide new insights for the treatment of obesity and diabetes.