Leptin is a hormone secreted by adipocytes that plays a pivotal role in regulating food intake, energy expenditure and neuroendocrine function. Leptin stimulates the oxidation of fatty acids and the uptake of glucose, and prevents the accumulation of lipids in nonadipose tissues, which can lead to functional impairments known as "lipotoxicity". The signalling pathways that mediate the metabolic effects of leptin remain undefined. The 5'-AMP-activated protein kinase (AMPK) potently stimulates fatty-acid oxidation in muscle by inhibiting the activity of acetyl coenzyme A carboxylase (ACC). AMPK is a heterotrimeric enzyme that is conserved from yeast to humans and functions as a 'fuel gauge' to monitor the status of cellular energy. Here we show that leptin selectively stimulates phosphorylation and activation of the alpha2 catalytic subunit of AMPK (alpha2 AMPK) in skeletal muscle, thus establishing a previously unknown signalling pathway for leptin. Early activation of AMPK occurs by leptin acting directly on muscle, whereas later activation depends on leptin functioning through the hypothalamic-sympathetic nervous system axis. In parallel with its activation of AMPK, leptin suppresses the activity of ACC, thereby stimulating the oxidation of fatty acids in muscle. Blocking AMPK activation inhibits the phosphorylation of ACC stimulated by leptin. Our data identify AMPK as a principal mediator of the effects of leptin on fatty-acid metabolism in muscle.