In the central nervous system, steroidogenic factor 1 (SF‐1) is required for terminal differentiation of neurons within the ventromedial hypothalamus (VMH). Given the importance of this brain region in regulating physiological homeostasis including energy balance, we asked how sf‐1 gene dosage affects VMH function. Despite an apparent normal VMH cytoarchitecture, sf‐1 heterozygous (+/−) mice exhibited diet‐induced obesity when they were group housed with hyperphagia and impaired sympathetic activity. On the basis of previous findings suggesting brain‐derived neurotrophic factor (bdnf) as an SF‐1 target gene, we assessed the colocalization of SF‐1 and BDNF expressing neurons, as well as expression of the four exon‐specific bdnf promoter transcripts in the VMH. Indeed, a subset of neurons located primarily in the ventrolateral VMH coexpress SF‐1 and BDNF, and in contrast to other brain regions, bdnf I, II, and IV but not III are found. Consistent with these findings, cellular assays showed that SF‐1 is able to activate exon I and IV promoters. More important, levels of bdnf I and IV in the VMH were reduced in heterozygous mice similar to levels observed in fasted wild‐type mice. Collectively, we propose that a reduction in the sf‐1 gene dosage directly affects BDNF levels in the VMH and disrupts normal hypothalamic function. J. Comp. Neurol. 498:637–648, 2006. © 2006 Wiley‐Liss, Inc.