To test the hypothesis that induction of BDNF may contribute to changes in hippocampal excitability occurring during the female reproductive cycle, we examined the distribution of BDNF immunoreactivity and changes in CA1 and CA3 electrophysiology across the estrous cycle in rats. Hippocampal BDNF immunoreactivity increased on the day of proestrus as well as on the following morning (estrus), relative to metestrus or ovariectomized animals. Changes in immunoreactivity were clearest in mossy fiber axons of dentate gyrus granule cells, which contain the highest concentration of BDNF. Increased immunoreactivity was also apparent in the neuropil-containing dendrites of CA1 and CA3 neurons. Electrophysiological recordings in hippocampal slices showed robust cycle-dependent differences. Evoked responses of CA1 neurons to Schaffer collateral stimulation changed over the cycle, with larger maximum responses at both proestrus and estrus relative to metestrus. In area CA3, repetitive hilar stimuli frequently evoked multiple population spikes at proestrus and estrus but only rarely at other cycle stages, and never in slices of ovariectomized rats. Hyperexcitability in area CA3 at proestrus was blocked by exposure to the high-affinity neurotrophin receptor antagonist K252a, or an antagonist of the alpha7 nicotinic cholinergic receptor, whereas it was induced at metestrus by the addition of BDNF to hippocampal slices. These studies suggest that hippocampal BDNF levels change across the estrous cycle, accompanied by neurophysiological responses that resemble the effects of BDNF treatment. An estrogen-induced interaction of BDNF and alpha7 nicotinic receptors on mossy fibers seems responsible for estrous cycle changes in area CA3. Periovulatory changes in hippocampal function may, thus, involve estrogen-induced increases in BDNF expression.