Hormone exposure, including testosterone and its metabolite estradiol, induces a myriad of effects during a critical period of brain development that are necessary for brain sexual differentiation. Nuclear volume, neuronal morphology, and astrocyte complexity are examples of the wide range of effects by which testosterone and estradiol can induce permanent changes in the function of neurons for the purpose of reproduction in adulthood. This review will examine the multitude of mechanisms by which steroid hormones induce these permanent changes in brain structure and function. Elucidating how steroids alter brain development sheds light on how individual variation in neuronal phenotype is established during a critical period.