Peripheral steroid hormones act on brain tissues through intracellular receptor-mediated mechanisms to regulate several important brain neuronal functions. Therefore, the brain is considered to be a target site of steroid hormones. However, it is now established that the brain itself also synthesizes steroids de novo from cholesterol. The pioneering discovery of Baulicu and his colleagues, using mammals, and our studies with non-mammals have opened the door of a new research field. Such steroids synthesized in the brain are called neurosteroids. Because certain structures in vertebrate brains have the capacity to produce neurosteroids identification of neurosteroidogenic cells in the brain is essential to understand the physiological role of neurosteroids in brain functions. Glial cells are generally accepted to be the major site for neurosteroid formation. but the concept of neurosteroidogenesis in brain neurons has up to now been uncertain. We recently demonstrated neuronal neurosteroidogenesis in the blain and indicated that the Purkinje cell, a typical cerebellar neuron, actively synthesizes several neurosteroids de novo from cholesterol in both mammals and non-mammals. Pregnenolone sulfate, one of neurosteroids synthesized in the Purkinje neuron, may contribute to some important events in the cerebellum by modulating neurotransmission. Progesterone, produced as a neurosteroid in this neuron only during neonatal life, may be involved in the promotion of neuronal and glial growth and neuronal synaptic contact ill the cerebellum. More recently, biosynthesis and actions of neurosteroids in pyramidal neurons of the hippocampus were also demonstrated. These serve an excellent model for the study of physiological roles of neurosteroids in the brain, because both cerebellar Purkinje neurons and hippocampal neurons play an important role in memory and learning. This paper summarizes the advances made in our understanding of neurosteroids, produced in neurons, and their actions. (C) 2000 Elsevier Science ireland Ltd and the Japan Neuroscience Society. All rights reserved.