The primary function of the hypothalamus in regulating homeostasis is to maintain the body's internal environment within a stable range. It plays a crucial role in controlling various physiological processes such as body temperature, thirst, hunger, and sleep cycles by integrating signals from the body and external environment. The hypothalamus releases various hormones that communicate with the pituitary gland to modulate bodily functions. This regulation is essential for survival, ensuring that metabolic processes operate optimally and enabling the body to respond effectively to stressors.