The objective is to identify and test regulatory options for creating supportive environments for physical activity and healthy eating among local governments in Victoria, Australia. A literature review identified nine potential areas for policy intervention at local government level, including the walking environment and food policy. Discussion documents were drafted which summarized the public health evidence and legal framework for change in each area. Levels of support for particular interventions were identified through semi-structured interviews conducted with key informants from local government. We conducted 11 key informant interviews and found support for policy intervention to create environments supportive of physical activity but little support for policy changes to promote healthy eating. Participants reported lack of relevance and competing priorities as reasons for not supporting particular interventions. Promoting healthy eating environments was not considered a priority for local government above food safety. There is a real opportunity for action to prevent obesity at local government level (e.g. mandate the promotion of healthy eating environments). For local government to have a role in the promotion of healthy food environments, regulatory change and suitable funding are required.