Summary Intraspecies social interactions are integral for survival and maintenance of society among all mammalian species. Yet, our understanding of the neural systems and mechanisms involved in the establishment of social connectedness are limited. Since their initial discovery as regulators of sleep/wakefulness and appetite in the brain, the hypocretin/orexin neurons have also been shown to play an essential role in modulating energy homeostasis, motivated and emotional behavior. These neurons are located exclusively in the hypothalamus which, regulates complex and goal-directed behaviors. The hypothalamus also plays an important role in the modulation of social behavior by encoding internal states. However, our understanding of the role of hypocretin neurons in social behavior is currently limited. To address this knowledge gap, we performed a combination of fiber photometry and machine learning based behavioral analysis in female and male mice expressing GCaMP6s in hypocretin neurons. We then applied optogenetic and pharmacological inhibition of hypocretin neuron signaling to determine the necessity of the hcrt neuron population for social behavior. Our results indicate that hypocretin neurons exhibit a robust increase in activity in response to social interaction in both female and male mice. We show here for the first time a social discrimination signal that is encoded differentially by hcrt neurons based on the nature of the social encounter. The intensity of the hcrt neuron activity predicts the subsequent duration of social interaction. The optogenetic inhibition of hypocretin neuron activity during social behavior leads to a reduction in the amount of time mice are engaged in social interaction in males but not in females. Blocking hcrt1 (orexin 1) receptors similarly reduces social interaction in males only. Reduced hcrt1 receptor signaling results in increased activity in the insular cortex and reduced activity in the VTA after social interaction in male mice. Together, these data implicate the lateral hypothalamus hypocretin neurons as a sexually dimorphic key regulator within the larger network of neural systems involved in social behavior. Our findings carry significant implications for the treatment of neuropsychiatric diseases characterized by social dysfunction, particularly considering the varying prevalence observed across different sexes.