The gastrointestinal peptide hormone ghrelin stimulates appetite in rodents and humans via hypothalamic actions. We discovered expression of ghrelin in a previously uncharacterized group of neurons adjacent to the third ventricle between the dorsal, ventral, paraventricular, and arcuate hypothalamic nuclei. These neurons send efferents onto key hypothalamic circuits, including those producing neuropeptide Y (NPY), Agouti-related protein (AGRP), proopiomelanocortin (POMC) products, and corticotropin-releasing hormone (CRH). Within the hypothalamus, ghrelin bound mostly on presynaptic terminals of NPY neurons. Using electrophysiological recordings, we found that ghrelin stimulated the activity of arcuate NPY neurons and mimicked the effect of NPY in the paraventricular nucleus of the hypothalamus (PVH). We propose that at these sites, release of ghrelin may stimulate the release of orexigenic peptides and neurotransmitters, thus representing a novel regulatory circuit controlling energy homeostasis.