Insulin signaling can be modulated by several isoforms of PKC in peripheral tissues. Here, we assessed whether one specific isoform, PKC-theta, was expressed in critical CNS regions that regulate energy balance and whether it mediated the deleterious effects of diets high in fat, specifically palmitic acid, on hypothalamic insulin activity in rats and mice. Using a combination of in situ hybridization and immunohistochemistry, we found that PKC-theta was expressed in discrete neuronal populations of the arcuate nucleus, specifically the neuropeptide Y/agouti-related protein neurons and the dorsal medial nucleus in the hypothalamus. CNS exposure to palmitic acid via direct infusion or by oral gavage increased the localization of PKC-theta to cell membranes in the hypothalamus, which was associated with impaired hypothalamic insulin and leptin signaling. This finding was specific for palmitic acid, as the monounsaturated fatty acid, oleic acid, neither increased membrane localization of PKC-theta nor induced insulin resistance. Finally, arcuate-specific knockdown of PKC-theta attenuated diet-induced obesity and improved insulin signaling. These results suggest that many of the deleterious effects of high-fat diets, specifically those enriched with palmitic acid, are CNS mediated via PKC-theta activation, resulting in reduced insulin activity.