Contrary to the situation in adulthood, gamma-aminobutyric [corrected] acid (GABA)(A) receptor activation during early brain development depolarizes neurons sufficiently to open L-type voltage-gated Ca(2+) channels. Because GABA is excitatory during the sensitive period of steroid-mediated brain sexual differentiation, we investigated whether estradiol modulates excitatory GABA during this period, by examining two parameters: 1) magnitude of GABA-induced calcium transients; and 2) developmental duration of excitatory GABA. Dissociated hypothalamic neurons from embryonic-day-15 rat embryos were loaded with the Ca(2+) indicator, fura-2, and transient rises in [Ca(2+)](i) (Ca(2+) transient) were measured after application of 10 microM muscimol, a GABA(A) receptor agonist. Cells were treated with 10(-10) M estradiol or vehicle from 0-3 days in vitro (DIV) and imaged on 4 DIV, whereas others were treated from 3-6 DIV and imaged on 7 DIV. The mean amplitude of Ca(2+) transients after muscimol administration were 68% and 61% higher in estradiol-treated neurons on 4 DIV and 7 DIV, respectively, relative to controls. Consistent with GABA becoming inhibitory in mature neurons, 50% fewer control neurons responded on DIV 7, relative to DIV 4. However, estradiol treatment maintained excitatory GABA on DIV 7 (72% in estradiol-treated vs. 35% in control). This is the first report of hormonal modulation of excitatory GABA, and it suggests that estradiol may mediate sexual differentiation by enhancing GABA-induced increases in intracellular Ca(2+).