Aromatase is a unique cytochrome P450 that catalyzes the removal of the 19-methyl group and aromatization of the A-ring of androgens for the synthesis of estrogens. All human estrogens are synthesized via this enzymatic aromatization pathway. Aromatase inhibitors thus constitute a frontline therapy for estrogen-dependent breast cancer. Despite decades of intense investigation, this enzyme of the endoplasmic reticulum membrane has eluded all structure determination efforts. We have determined the crystal structure of the highly active aromatase purified from human placenta, in complex with its natural substrate androstenedione. The structure shows the binding mode of androstenedione in the catalytically active oxidized high-spin ferric state of the enzyme. Hydrogen bond-forming interactions and tight packing hydrophobic side chains that complement the puckering of the steroid backbone provide the molecular basis for the exclusive androgenic specificity of aromatase. Locations of catalytic residues and water molecules shed new light on the mechanism of the aromatization step. The structure also suggests a membrane integration model indicative of the passage of steroids through the lipid bilayer.