In neuroendocrinology, it is believed that steroid hormones are synthesized in the gonads and/or adrenal glands, and reach the brain via the blood circulation. In contrast to this view, we are in progress of demonstrating that estrogens and androgens are also synthesized locally by cytochrome P450s in the hippocampus, and that these steroids act rapidly to modulate neuronal synaptic plasticity. We demonstrated that estrogens were locally synthesized in the adult hippocampal neurons. In the pathway of steroidogenesis, cholesterol is converted to pregnenolone (by P450scc), dehydroepiandrosterone [by P450(17α)], androstenediol (by 17β-hydroxysteroid dehydrogenase, 17β-HSD), testosterone (by 3β-HSD) and finally to estradiol (by P450arom) and dihydrotestosterone (by 5α-reductase). The basal concentration of estradiol in the hippocampus was approximately 1 n M, which was greater than that in blood plasma. Significant expression of mRNA for P450scc, P450(17α), P450arom, 17β-HSD, 3β-HSD and 5α-reductase was demonstrated by RT-PCR. Their mRNA levels in the hippocampus were 1/200–1/5,000 of those in the endocrine organs. Localization of P450(17α) and P450arom was observed in synapses in addition to endoplasmic reticulum of principal neurons using immunoelectron microscopy. Different from slow action of gonadal estradiol which reaches the brain via the blood circulation, hippocampal neuron-derived estradiol may act locally and rapidly within the neurons. For example, 1 n M 17β-estradiol rapidly enhanced the long-term depression (LTD) not only in CA1 but also in CA3 and dentate gyrus. The density of thin spines was selectively increased within 2 h upon application of 1 n M estradiol in CA1 pyramidal neurons. Only ERα agonist propyl-pyrazole-trinyl-phenol induced the same enhancing effect as estradiol on both LTD and spinogenesis in the CA1. ERβ agonist hydroxyphenyl-propionitrile suppressed LTD and did not affect spinogenesis. Localization of estrogen receptor ERα in spines in addition to nuclei of principal neurons implies that synaptic ERα can drive rapid modulation of synaptic plasticity by endogenous estradiol.