Sex steroids play an important role in the development and functioning of the central nervous system (CNS); however, the mechanisms by which such hormones exert these effects are not well understood. We addressed the question as to whether sex steroids affect the development of the hypothalamus, at least in part, by acting as a trophic factor to modulate the number of neurons in the hypothalamus. To this end, primary hypothalamic cultures were prepared from the brains of embryonic (day 15) fetuses. Cultures received either 17β-es-tradiol (10<sup>–12</sup> M) or vehicle 6 h after seeding and everyday throughout the study. As early as 24 h later, cultures receiving 17β-estradiol had significantly more neurons (44%, p < 0.001) than the control cultures. This effect not only continued throughout the duration of the study, but the difference between the two groups increased so that after 5 days, 17β-estradiol-treated cultures had 209% more neurons than control cultures (p < 0.001). Thus, addition of 17β-estradiol to fetal hypothalamic cultures produced a significant increase in the number of neurons surviving in vitro. The presence of glia was not required for this phenomenon, since the number of neurons surviving in glial-free cultures was also significantly increased by the addition of 17β-estradiol. The neuron survival promoting effect of 17β-estradiol was saturable and could be blocked by the estrogen antagonist tamoxifen (10<sup>-7</sup> M). Testosterone (10<sup>–10</sup> M), but not the nonaromatizable androgen dihydrotestosterone (10<sup>–10</sup> M), could mimic the neuron survival-promoting effects of estradiol. Furthermore, estradiol had no significant effect on the in vitro survival of cerebral cortical neurons. These results suggest that one mechanism by which sex steroids may affect the development of the hypothalamus is through the modulation of the number of neurons that survive and that this effect is most likely mediated, at least in part, through the estrogen receptor.