Activation of hypothalamic KATP channels reduces endogenous glucose production (EGP) in nondiabetic rodents and humans, but this response is lost in T2D. Lowering FFA with nicotinic acid (NA) restored central regulation of EGP in T2D subjects (Diabetes 2019; 1799P). High FFA levels, typical of T2D, may increase endoplasmic reticulum (ER) stress and thereby impair hypothalamic control of EGP. To explore how increased FFA might impact central regulation of EGP, we harvested hypothalamic wedges from n=10 Zucker Diabetic Fatty (ZDF) rats (glucose ~ 370 mg/dL) following infusion of NA or saline (Alzet minipump) for 18 h. Nondiabetic rats (n=5) were studied as controls. Gene expression of KATP channel subunit Kir6.2 was decreased in ZDF rats. Upon lowering FFA with NA, hypothalamic expression of this major subunit was restored (Fig 1a). Conversely, increased expression of genes regulating ER stress was reversed by NA (Fig 1b). Directly treating ZDF rat brain slices with NA did not alter the expression of these genes, suggesting that NA's effects were mediated by lowering FFA (Fig 1c). In conclusion, hypothalamic effects of elevated FFA include reduced KATPchannel expression and increased expression of ER stress genes, both of which may contribute reversibly to the loss of central regulation of EGP in T2D. These findings are consistent with our observations in humans noted above, suggesting that FFA could be a therapeutic target in T2D. Disclosure M. Nogueira Cordeiro: None. V.H. Routh: None. A. Manavalan: None. P.M. Mathias: None. C.E. Boyle: None. A.C. Rios Chen: None. N. Jiang: None. N. Friedman: None. Y. Demirhan: None. M. Hawkins: None. K. Zhang: None. Funding American Diabetes Association (7-08-CR-28 to M.H.); National Institutes of Health (R01DK069861); Diabetes Action Research and Education Foundation