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Prader-Willi syndrome (PWS) is caused by a loss of paternally expressed genes in an imprinted region of chromosome 15q. Among the canonical PWS phenotypes are hyperphagic obesity, central hypogonadism, and low growth hormone (GH). Rare microdeletions in PWS patients define a 91-kb minimum critical deletion region encompassing 3 genes, including the noncoding RNA gene SNORD116. Here, we found that protein and transcript levels of nescient helix loop helix 2 (NHLH2) and the prohormone convertase PC1 (encoded by PCSK1) were reduced in PWS patient induced pluripotent stem cell–derived (iPSC-derived) neurons. Moreover, Nhlh2 and Pcsk1 expression were reduced in hypothalami of fasted Snord116 paternal knockout (Snord116p–/m+) mice. Hypothalamic Agrp and Npy remained elevated following refeeding in association with relative hyperphagia in Snord116p–/m+ mice. Nhlh2-deficient mice display growth deficiencies as adolescents and hypogonadism, hyperphagia, and obesity as adults. Nhlh2 has also been shown to promote Pcsk1 expression. Humans and mice deficient in PC1 display hyperphagic obesity, hypogonadism, decreased GH, and hypoinsulinemic diabetes due to impaired prohormone processing. Here, we found that Snord116p–/m+ mice displayed in vivo functional defects in prohormone processing of proinsulin, pro-GH–releasing hormone, and proghrelin in association with reductions in islet, hypothalamic, and stomach PC1 content. Our findings suggest that the major neuroendocrine features of PWS are due to PC1 deficiency.