Steroids influence neuronal function through binding to cognate intracellular receptors which may act as transcription factors in the regulation of gene expression. In addition, certain so-called neuroactive steroids modulate ligand-gated ion channels via non-genomic mechanisms. Especially distinct 3alpha-reduced metabolites of progesterone and deoxycorticosterone are potent positive allosteric modulators of gamma-aminobutyric acid type A (GABA(A)) receptors. However, also classical steroid hormones such as 17beta-estradiol, testosterone and progesterone are neuroactive steroids because they may act as functional antagonists at the 5-hydroxytryptamine type 3 (5-HT(3)) receptor, a ligand-gated ion channel or distinct glutamate receptors. A structure-activity relationship for the actions of a variety of steroids at the 5-HT(3) receptor was elaborated that differed considerably from that known for GABA(A) receptors. Although a bindings site for steroids at GABA(A) receptors is still a matter of debate, meanwhile there is also evidence that steroids interact allosterically with ligand-gated ion channels at the receptor membrane interface. On the other hand, also 3alpha-reduced neuroactive steroids may regulate gene expression via the progesterone receptor after intracellular oxidation into 5alpha-pregnane steroids. Animal studies showed that progesterone is converted rapidly into GABAergic neuroactive steroids in vivo. Progesterone reduces locomotor activity in a dose-dependent fashion in male Wistar rats. Moreover, progesterone and 3alpha-reduced neuroactive steroids produce a benzodiazepine-like sleep EEG profile in rats and humans. During major depression, there is a disequilibrium of such 3alpha-reduced neuroactive steroids which is corrected by successful treatment with antidepressant drugs. Neuroactive steroids may further be involved in the treatment of depression and anxiety with antidepressants in patients during ethanol withdrawal. Studies in patients with panic disorder suggest that neuroactive steroids may also play a role in modulating human anxiety. Both the genomic and non-genomic effects of steroids in the brain may contribute to the pathophysiology of psychiatric disorders and the mechanisms of action of antidepressants. Neuroactive steroids affect a broad spectrum of behavioral functions through their unique molecular properties and may represent a new treatment strategy for neuropsychiatric disorders.