Melanin concentrating hormone (MCH) is a hypothalamic neuropeptide known to play a critical role in energy balance. We have previously reported that overexpression of MCH is associated with mild obesity. In addition, mice have substantial hyperinsulinemia and islet hyperplasia that is out of proportion with their degree of obesity. In this study, we further explored the role of MCH in the endocrine pancreas. Both MCH and MCHR1 are expressed in mouse and human islets and in clonal beta-cell lines as assessed using quantitative real-time PCR and immunohistochemistry. Mice lacking MCH (MCH-KO) on either a C57Bl/6 or 129Sv genetic background showed a significant reduction in beta-cell mass and complemented our earlier observation of increased beta-cell mass in MCH-overexpressing mice. Furthermore, the compensatory islet hyperplasia secondary to a high-fat diet, which was evident in wild-type controls, was attenuated in MCH-KO. Interestingly, MCH enhanced insulin secretion in human and mouse islets and rodent beta-cell lines in a dose-dependent manner. Real-time PCR analyses of islet RNA derived from MCH-KO revealed altered expression of islet-enriched genes such as glucagon, forkhead homeobox A2, hepatocyte nuclear factor (HNF)4alpha, and HNF1alpha. Together, these data provide novel evidence for an autocrine role for MCH in the regulation of beta-cell mass dynamics and in islet secretory function and suggest that MCH is part of a hypothalamic-islet (pancreatic) axis.