Several steroid molecules, including androgens, estrogens, progestagens, and corticostereroids, are able to modulate the brain development and functions. These compounds are not always active in their own natural molecular configuration but they often need to be transformed at the level of their target cells into 'active metabolites'. The two major metabolic pathways that transform steroids in the brain are: the 5alpha-reductase-3alpha-hydroxy-steroid dehydrogenase and the aromatase pathways. Both are present in the brain and probably exert specific roles in the mechanism of action of hormonal steroids. In this article we briefly review some important findings achieved in our own and in other laboratories concerning the cellular and subcellular brain distribution, development, regulation, cloning, and molecular characterization of the involved enzymes. In particular, the recent identification of two isoforms of the 5alpha-reductase, the type 1 and type 2, possessing different structural, biochemical, and distribution characteristics has attracted a considerable attention. The few data available on their brain distribution have been carefully considered. Finally, we have tried to focus on the role of the steroid metabolites in the brain, both when they interact with genomic and with membrane receptors. In particular, some unpublished observations on the effects of two 5alpha-reductase inhibitors on progesterone-induced anesthesia, a phenomenon mediated through the GABA(A) receptor, are presented.