The estrogen hypothesis of schizophrenia suggests that estrogen is a natural neuroprotector in women and that exogenous estrogen may have antipsychotic potential, but results of clinical studies have been inconsistent. We have recently shown using the latent inhibition (LI) model of schizophrenia that 17β-estradiol exerts antipsychotic activity in ovariectomized (OVX) rats. The present study sought to extend the characterization of the antipsychotic action of 17β-estradiol (10, 50 and 150 μg/kg) by testing its capacity to reverse amphetamine- and MK-801-induced LI aberrations in gonadally intact female and male rats. No-drug controls of both sexes showed LI, ie, reduced efficacy of a previously non-reinforced stimulus to gain behavioral control when paired with reinforcement, if conditioned with two but not five tone-shock pairings. In both sexes, amphetamine (1 mg/kg) and MK-801 (50 μg/kg) produced disruption (under weak conditioning) and persistence (under strong conditioning) of LI, modeling positive and negative/cognitive symptoms, respectively. 17β-estradiol at 50 and 150 μg/kg potentiated LI under strong conditioning and reversed amphetamine-induced LI disruption in both males and females, mimicking the action of typical and atypical antipsychotic drugs (APDs) in the LI model. 17β-estradiol also reversed MK-induced persistent LI, an effect mimicking atypical APDs and NMDA receptor enhancers, but this effect was observed in males and OVX females but not in intact females. These findings indicate that in the LI model, 17β-estradiol exerts a clear-cut antipsychotic activity in both sexes and, remarkably, is more efficacious in males and OVX females where it also exerts activity considered predictive of anti-negative/cognitive symptoms.