Prader-Willi syndrome (PWS) is the predominant genetic cause of obesity in humans. Recent clinical reports have suggested that micro-deletion of the Snord116 gene cluster can lead to PWS, however, the extent of the contributions of the encoded snoRNAs is unknown. Here we show that mice lacking Snord116 globally have low birth weight, increased body weight gain, energy expenditure and hyperphagia. Consistent with this, microarray analysis of hypothalamic gene expression revealed a significant alteration in feeding related pathways that was also confirmed by in situ hybridisation. Importantly, selective deletion of Snord116 only from NPY expressing neurons mimics almost exactly the global deletion phenotype including the persistent low birth weight, increased body weight gain in early adulthood, increased energy expenditure and hyperphagia. Mechanistically, the lack of Snord116 in NPY neurons leads to the upregulation of NPY mRNA consistent with the hyperphagic phenotype and suggests a critical role of Snord116 in the control of NPY neuronal functions that might be dysregulated in PWS.