Ghrelin is an appetite-stimulating peptide hormone and produced in the stomach. Serine 3 on ghrelin must be acylated by the lipid transferase known as Ghrelin-O-acyltransferase (GOAT) in order for the peptide to become physiologically-active and bind to the cognate receptor, growth hormone secretagogue receptor type 1a (GHSR1a). GHSR1a has been known to be expressed in the feeding center of the hypothalamus. However, the interest in GHSR1a increased dramatically among researchers in various biomedical fields when GHSR1a mRNA was found wide-spread in the brain including the hippocampus. Current understanding is that GHSR1a has multifaceted functions beyond the regulation of metabolism. In the blood, a nonacylated form of ghrelin (des-acyl ghrelin) exists in far greater amounts. Des-acyl ghrelin can cross the blood-brain barrier (BBB), but it cannot bind to GHSR1a in the brain. Thus, the identification of the source for acyl ghrelin in the brain became the critical and urgent quest. Here, we discuss the presence of GOAT in the hippocampus and its ability to acylate ghrelin locally within the hippocampus. We will show that GOAT is localized specifically at the base of the dentate granule cell layer in the rat and wild-type mouse, but not in the GHSR1a knockout mouse. This evidence points the possibility that the expression of GHSR1a may be a prerequisite for the synthesis of GOAT in the hippocampus. We will also show that: (1) the activation of GHSR1a by acyl ghrelin upregulates the cAMP and CREB phosphorylation, (2) amplifies the NMDA receptor-mediated synaptic transmission by phosphorylating GluN1 subunit at Ser896/897, and (3) activates Fyn kinase and induces GluN2B phosphorylation at Tyr1336. In summary, GOAT is a critical molecule that acts as the master switch in the initiation of ghrelin-induced hippocampal synapse and neuron plasticity.