Fatty acid amide hydrolase (FAAH) knockout mice are prone to excess energy storage and adiposity, whereas mutations in FAAH are associated with obesity in humans. However, the molecular mechanism by which FAAH affects energy expenditure (EE) remains unknown. Here we show that reduced energy expenditure in FAAH −/− mice could be attributed to decreased circulating triiodothyronine and thyroxine concentrations secondary to reduced mRNA expression of both pituitary thyroid-stimulating hormone and hypothalamic thyrotropin-releasing hormone. These reductions in the hypothalamic-pituitary-thyroid axis were associated with activation of hypothalamic peroxisome proliferating-activated receptor γ (PPARγ), and increased hypothalamic deiodinase 2 expression. Infusion of NAEs (anandamide and palmitoylethanolamide) recapitulated increases in PPARγ-mediated decreases in EE. FAAH −/− mice were also prone to diet-induced hepatic insulin resistance, which could be attributed to increased hepatic diacylglycerol content and protein kinase Cε activation. Our data indicate that FAAH deletion, and the resulting increases in NAEs, predispose mice to ectopic lipid storage and hepatic insulin resistance by promoting centrally mediated hypothyroidism. NAPEs) and N-acylethanolamines (NAEs) are nutrient-regulated lipokines that affect energy homeostasis through regulation of satiety and energy storage, selectively increasing in abundance with high-fat diet (HFD) feeding (1-7). NAPEs are hydrolyzed to produce diverse NAE species, which act as ligands for cannabinoid receptor 1 (CB1), G protein-coupled receptor 119 (GPR119), GPR55, peroxisome proliferating-activated receptor α (PPARα), and transient receptor potential cation channel subfamily V member 1 to affect appetite, gut hormone release, anxiety, and inflammation (8-12). Fatty acid amide hydrolase (FAAH) is the major enzyme responsible for the degradation of NAEs. An integral membrane protein, FAAH is expressed predominantly in the brain, liver, kidney, and intestine (13,14). Mice lacking FAAH (FAAH −/− mice) have increased body weight after 12 wk of HFD feeding, independent of food intake (7) and decreased energy expenditure (EE) (15). Furthermore, SNPs in the FAAH gene correlate with obesity in humans (16,17).NAEs are lipid-signaling molecules that have diverse physiological effects. Anandamide (AEA), an endocannabinoid and an endogenous ligand of CB1, is the most well-studied NAE (11). Inhibition of CB1 promotes EE, leading to decreased body weight in HFD-fed mice (18). In addition, treatment with the CB1 inhibitor rimonabant increases oxygen consumption in isolated soleus muscle of obese mice (5).Because FAAH is expressed in metabolically active tissues and may be a genetic cause of obesity in humans, we investigated EE and tissue-specific insulin sensitivity in FAAH −/− and FAAH +/+ mice. To do so, we measured the expression of genes and hormones known to regulate EE, including PPARγ, proopiomelanocortin (POMC), and thyroid hormones. Here we show that FAAH regulates EE via the ac...