In adult mammalian brain, occurrence of the synthesis of estradiol from endogenous cholesterol has been doubted because of the inability to detect dehydroepiandrosterone synthase, P45017alpha. In adult male rat hippocampal formation, significant localization was demonstrated for both cytochromes P45017alpha and P450 aromatase, in pyramidal neurons in the CA1-CA3 regions, as well as in the granule cells in the dentate gyrus, by means of immunohistochemical staining of slices. Only a weak immunoreaction of these P450s was observed in astrocytes and oligodendrocytes. ImmunoGold electron microscopy revealed that P45017alpha and P450 aromatase were localized in pre- and postsynaptic compartments as well as in the endoplasmic reticulum in principal neurons. The expression of these cytochromes was further verified by using Western blot analysis and RT-PCR. Stimulation of hippocampal neurons with N-methyl-d-aspartate induced a significant net production of estradiol. Analysis of radioactive metabolites demonstrated the conversion from [(3)H]pregnenolone to [(3)H]estradiol through dehydroepiandrosterone and testosterone. This activity was abolished by the application of specific inhibitors of cytochrome P450s. Interestingly, estradiol was not significantly converted to other steroid metabolites. Taken together with our previous finding of a P450scc-containing neuronal system for pregnenolone synthesis, these results imply that 17beta-estradiol is synthesized by P45017alpha and P450 aromatase localized in hippocampal neurons from endogenous cholesterol. This synthesis may be regulated by a glutamate-mediated synaptic communication that evokes Ca(2+) signals.