To amend the Child Nutrition Act of 1966 to establish the Healthy Habits School Challenge Program to reduce childhood obesity by recognizing schools that are creating healthier school environments for children by promoting good nutrition and physical activity, and for other purposes.

Amends the Child Nutrition Act of 1966 to require local educational agencies (LEA) participating in the school lunch or breakfast programs to establish or expand a local school wellness policy for their schools that: (1) includes goals for nutrition education, physical activity, and other school-based activities that promote student wellness; (2) includes nutrition guidelines for all foods in school during the day that promote student health and reduce childhood obesity; (3) ensures that the dietary guidelines for reimbursable school meals are no less restrictive than those issued by the Secretary of Agriculture under the school lunch program; (4) provides for the measurement and oversight of the policy's implementation; and (5) involves parents, students, the school food authority, the school board, school administrators, and the public in its development.

Directs the Secretary to provide LEAs, school food authorities, and states, on request, information and technical assistance in: (1) establishing healthy school nutrition environments; (2) reducing childhood obesity; and (3) preventing diet-related chronic diseases.

Directs the Secretary to establish the Healthy Habits School Challenge program to reduce childhood obesity by recognizing schools that are creating healthier school environments for children by promoting good nutrition and physical activity. Requires such schools to adopt a model school wellness policy developed by the Secretary.

Requires the Secretary to contract with the Institute of Medicine to provide the Secretary with recommendations for updating the nutrition rules for the school lunch and breakfast programs.