Microglia are the resident immune cells in the central nervous system (CNS). Originally thought to be primarily responsible for disposing of cellular debris and responding to neural insults, emerging research now shows that microglia are highly dynamic cells involved in a variety of neurodevelopmental processes. The hypothalamus is a brain region critical for maintaining homeostatic processes such as energy balance, thirst, food intake, reproduction, and circadian rhythms. Given that microglia colonize the embryonic brain alongside key steps of hypothalamic development, here we tested whether microglia are required for the proper establishment of this brain region. The Colony-stimulating factor-1 receptor (Csf1r) is expressed by microglia, macrophages and osteoclasts, and is required for their proliferation, differentiation, and survival. Therefore, to eliminate microglia from the fetal brain, we treated pregnant dams with the CSF1R inhibitor PLX5622. We showed that approximately 99% of microglia were eliminated by embryonic day 15.5 (E15.5) after pregnant dams were placed on a PLX5622 diet starting at E3.5. Following microglia depletion, we observed elevated numbers of apoptotic cells accumulating throughout the developing hypothalamus. Once the PLX5622 diet was removed, microglia repopulated the postnatal brain within 7 days and did not appear to repopulate from Nestin+ precursors. Embryonic microglia depletion also resulted in a decreased litter size, as well as an increase in the number of pups that died within the first two postnatal days of life. In pups that survived, the elimination of microglia in the fetal brain resulted in a decrease in the number of Pro-opiomelanocortin (POMC) neurons and a concomitant accelerated weight gain starting at postnatal day 5 (P5), suggesting that microglia could be important for the development of cell types key to hypothalamic satiety centers. Moreover, surviving PLX5622 exposed animals displayed craniofacial and dental abnormalities, perhaps due to non-CNS effects of PLX5622 on macrophages and/or osteoclasts. Finally, depletion of microglia during embryogenesis had long-term sex-specific effects on behaviour, including the development of hyperactivity and anxiolytic-like behaviour in juvenile and adult female mice, respectively. Together, these data demonstrate an important role for microglia during the development of the embryonic hypothalamus, and perhaps the CNS more broadly.