Hypothalamic inflammation contributes to metabolic dysregulation and the onset of obesity. Dietary saturated fats activate microglia via a nuclear factor-kappa B (NFκB) mediated pathway to release pro-inflammatory cytokines resulting in dysfunction or death of surrounding neurons. Fatty acid binding proteins (FABPs) are lipid chaperones regulating metabolic and inflammatory pathways in response to fatty acids. Loss of FABP4 in peripheral macrophages via either molecular or pharmacologic mechanisms results in reduced obesity-induced inflammation via a UCP2-redox based mechanism. Despite the widespread appreciation for the role of FABP4 in mediating peripheral inflammation, the expression of FABP4 and a potential FABP4-UCP2 axis regulating microglial inflammatory capacity is largely uncharacterized. To that end, we hypothesized that microglial cells express FABP4 and that inhibition would upregulate UCP2 and attenuate palmitic acid (PA)-induced pro-inflammatory response. Gene expression confirmed expression of FABP4 in brain tissue lysate from C57Bl/6J mice and BV2 microglia. Treatment of microglial cells with an FABP inhibitor (HTS01037) increased expression of Ucp2 and arginase in the presence or absence of PA. Moreover, cells exposed to HTS01037 exhibited attenuated expression of inducible nitric oxide synthase (iNOS) compared to PA alone indicating reduced NFκB signaling. Hypothalamic tissue from mice lacking FABP4 exhibit increased UCP2 expression and reduced iNOS, tumor necrosis factor-alpha (TNF-α), and ionized calcium-binding adapter molecule 1 (Iba1; microglial activation marker) expression compared to wild type mice. Further, this effect is negated in microglia lacking UCP2, indicating the FABP4-UCP2 axis is pivotal in obesity induced neuroinflammation. To our knowledge, this is the first report demonstrating a FABP4-UCP2 axis with the potential to modulate the microglial inflammatory response.