Step 1: Understand the origin of somatostatin.
Somatostatin is a hormone that inhibits the release of several other hormones. It is secreted by multiple parts of the body, including the hypothalamus, pancreas, and gastrointestinal tract.
Step 2: Focus on the hypothalamic function.
In the hypothalamus, somatostatin acts as a growth hormone-inhibiting hormone (GHIH), inhibiting the release of growth hormone from the anterior pituitary.
Conclusion: The correct answer is Hypothalamus (Option 2).