Hypothalamic obesity (HyOb) was first defined as the significant polyphagia and weight gain that occurs after extensive suprasellar operations for excision of hypothalamic tumours. However, polyphagia and weight gain complicate other disorders related to the hypothalamus, including those that cause structural damage to the hypothalamus like tumours, trauma, radiotherapy; genetic disorders such as Prader–Willi syndrome; side effects of psychotropic drugs; and mutations in several genes involved in hypothalamic satiety signalling. Moreover, ‘simple’ obesity is associated with polymorphisms in several genes involved in hypothalamic weight‐regulating pathways. Thus, understanding HyOb may enhance our understanding of ‘simple’ obesity. This review will claim that HyOb is a far wider phenomenon than hitherto understood by the narrow definition of post‐surgical weight gain. It will emphasize the similarity in clinical characteristics and therapeutic approaches for HyOb, as well as its mechanisms. HyOb, regardless of its aetiology, is a result of impairment in hypothalamic regulatory centres of body weight and energy expenditure. The pathophysiology includes loss of sensitivity to afferent peripheral humoral signals, such as, leptin on the one hand and dysfunctional afferent signals, on the other hand. The most important afferent signals deranged are energy regulation by the sympathetic nervous system and regulation of insulin secretion. Dys‐regulation of 11β‐hydroxysteroid dehydrogenase 1 (11β‐HSD1) activity and melatonin may also have a role in the development of HyOb. The complexity of the syndrome requires simultaneous targeting of several mechanisms that are deranged in the HyOb patient. We review the studies evaluating possible treatment strategies, including sympathomimetics, somatostatin analogues, triiodothyronine, sibutramine, and surgery.