Serum androgens as well as their precursors and metabolites decrease from the age of 30-40 yr in women, thus suggesting that a more physiological hormone replacement therapy at menopause should contain an androgenic compound. It is important to consider, however, that most of the androgens in women, especially after menopause, are synthesized in peripheral intracrine tissues from the inactive precursors dehydroepiandrosterone (DHEA) and DHEA sulfate (DHEA-S) of adrenal origin. Much progress in this new area of endocrine physiology called intracrinology has followed the cloning and characterization of most of the enzymes responsible for the transformation of DHEA and DHEA-S into androgens and estrogens in peripheral target tissues, where the locally produced sex steroids are exerting their action in the same cells in which their synthesis takes place without significant diffusion into the circulation, thus seriously limiting the interpretation of serum levels of active sex steroids. The sex steroids made in peripheral tissues are then inactivated locally into more water-soluble compounds that diffuse into the general circulation where they can be measured. In a series of animal models, androgens and DHEA have been found to inhibit breast cancer development and growth and to stimulate bone formation. In clinical studies, DHEA has been found to increase bone mineral density and to stimulate vaginal maturation without affecting the endometrium, while improving well-being and libido with no significant side effects. The advantage of DHEA over other androgenic compounds is that DHEA, at physiological doses, is converted into androgens and/or estrogens only in the specific intracrine target tissues that possess the appropriate physiological enzymatic machinery, thus limiting the action of the sex steroids to those tissues possessing the tissue-specific profile of expression of the genes responsible for their formation, while leaving the other tissues unaffected and thus minimizing the potential side effects observed with androgens or estrogens administered systemically.