This study explores the biological role of the Fat Mass and Obesity associated (FTO) gene locus on milk composition in German Holstein cattle. Since FTO controls energy homeostasis and expenditure and the FTO locus has repeatedly shown association with obesity in human studies, we tested FTO as a candidate gene in particular for milk fat yield, which represents a high amount of energy secreted during lactation. The study was performed on 2,402 bulls and 860 cows where dense milk composition data were available. Genetic information was taken from a 2 Mb region around FTO. Five SNPs and two haplotype blocks in a 725 kb region covering FTO and the neighboring genes RPGRIP1L, U6ATAC, and 5 S rRNA were associated with milk fat yield and also affected protein yield in the same direction. Interestingly, higher frequency SNP alleles and haplotypes within the FTO gene increased milk fat and protein yields by up to 2.8 and 2.2 kg per lactation, respectively, while the most frequent haplotype in the upstream block covering exon 1 of FTO to exon 15 of RPGRIP1L had opposite effects with lower fat and milk yield. Both haplotype blocks were also significant in cows. The loci accounted for about 1% of the corresponding trait variance in the population. The association signals not only provided evidence for at least two causative mutations in the FTO locus with a functional effect on milk but also milk protein yield. The pleiotropic effects suggest a biological function on the usage of energy resources and the control of energy balance rather than directly affecting fat and protein synthesis. The identified effect of the obesity gene locus on milk energy content suggests an impact on infant nutrition by breast feeding in humans.