The abundant CNS cholesterol and its sulfate derivative serve as precursors of different neurosteroids, which bidirectionally modulate neuronal excitability, by potentiating or inhibiting function of the GABAA receptors. The regulation of GABAA receptors in the CNS by the steroids of central or peripheral origin may constitute a vital means of brain-body communication, essential for integrated whole organism responses to external stimuli or internal signals. Modulation of the brain GABA receptors by neurosteroids may form the basis of a myriad of psychophysiological phenomena, such as memory, stress, anxiety, sleep, depression, seizures and others. Therefore, the aberrant synthesis of centrally-active steroids may contribute to defects in neurotransmission, resulting in a variety of neural and affective disorders. The biosynthesis of neurosteroids may also be altered by diet and certain psychotropic drugs, thereby affecting excitation of neurons. Hereditary differences in the level of synthesis and catabolism of different neurosteroids may underlie individual variations in CNS excitability, contributing to differences in personality traits, including the inherited susceptibility to drug addition.