Psychiatric symptoms such as depression and anxiety are important clinical features of Huntington's disease (HD). However, the underlying neurobiological substrate for the psychiatric features is not fully understood. In order to explore the biological origin of depression and anxiety in HD, we used a mouse model that expresses the human full-length mutant huntingtin, the BACHD mouse. We found that the BACHD mice displayed depressive- and anxiety-like features as early as at 2 months of age as assessed using the Porsolt forced swim test (FST), the sucrose preference test and the elevated plus maze (EPM). BACHD mice subjected to chronic treatment with the anti-depressant sertraline were not different to vehicle-treated BACHD mice in the FST and EPM. The behavioral manifestations occurred in the absence of reduced hippocampal cell proliferation/neurogenesis or upregulation of the hypothalamic–pituitary–adrenal axis. However, alterations in anxiety- and depression-regulating genes were present in the hypothalamus of BACHD mice including reduced mRNA expression of neuropeptide Y, tachykinin receptor 3 and vesicular monoamine transporter type 2 as well as increased expression of cocaine and amphetamine regulated transcript. Interestingly, the orexin neuronal population in the hypothalamus was increased and showed cellular atrophy in old BACHD mice. Furthermore, inactivation of mutant huntingtin in a subset of the hypothalamic neurons prevented the development of the depressive features. Taken together, our data demonstrate that the BACHD mouse recapitulates clinical HD with early psychiatric aspects and point to the role of hypothalamic dysfunction in the development of depression and anxiety in the disease.