The role of steroid hormones as a conduit for reciprocal glial-neuronal communication is an emerging but relatively unexplored concept. Research in our laboratory has discovered that the relationship between astrocytic and neuronal morphology during development is distinct for different brain regions and provides a fundamental basis for region-specific sexual differentiation. The functional significance of estradiol-induced differentiation of astrocytes and the cross-talk of these cells with neurons includes permanent changes in synaptic patterning and control of adult reproductive behaviors. The cellular mechanisms as currently understood for each region are discussed and unanswered questions as well as other areas for future research are reviewed.