Glucocorticoids have been implicated as pathophysiological mediators of obesity and insulin resistance and are regulated by 11beta-hydroxysteroid dehydrogenase type 1 (11beta-HSD1). This enzyme regenerates active corticosterone from inactive 11-keto forms. To assess the role of 11beta-HSD1-mediated synthesis of active corticosterone in leptin-related obesity and diabetes, we examined the peripheral effect of leptin on 11beta-HSD1 activity and gene expression in vivo and in vitro in hepatocytes from ob/ob mice and in liver of streptozotocin (STZ)-treated ob/ob mice. We observed an inverse relationship between hepatic 11beta-HSD1 expression and body weight in ob/ob mice and lean littermates. Leptin treatment of ob/ob mice markedly increased hepatic 11beta-HSD1 activity and mRNA expression. This induction of 11beta-HSD1 expression corresponded to reduced levels of circulating corticosterone and weight loss in ob/ob mice treated with leptin, indicating that impaired hepatic 11beta-HSD1 expression may contribute to the pathogenesis of obesity in ob/ob mice. In addition, leptin treatment of STZ-treated ob/ob mice caused marked increases in hepatic 11beta-HSD1 levels associated with decreased body weight and a significant reduction in hyperglycemia due to pancreatic beta-cell damage. Addition of leptin to ob/ob mouse primary hepatocytes led to a dose-dependent increase in 11beta-HSD1 mRNA expression. In contrast, leptin did not influence 11beta-HSD1 expression in primary hepatocytes from db/db mice, indicating that leptin regulation of 11beta-HSD1 expression is probably mediated by the functional leptin receptor. Thus, leptin appears to be an important metabolic signal that directly activates intrahepatic corticosterone production. These findings suggest that the liver-specific interaction of leptin with 11beta-HSD1 is involved in the development of obesity and insulin resistance in ob/ob mice.