The hippocampal formation expresses high levels of adrenal steroid receptors and is a malleable brain structure that is important for certain types of learning and memory. It is also vulnerable to the effects of stress and trauma. The amygdala is an important target of stress and mediates physiological and behavioral responses associated with fear and strong emotions. The prefrontal cortex plays an important role in working memory and executive function and is also involved in extinction of learning. All 3 regions are targets of stress hormones, and stress is known to precipitate and exacerbate mood disorders. In long-term depressive illness, the hippocampus and prefrontal cortex undergo atrophy, whereas the amygdala is hyperactive in anxiety and mood disorders and may undergo a biphasic change in structure--increasing in size in acute depression and shrinking on long-term depression. In animal models of acute and chronic stress, neurons in the hippocampus and prefrontal cortex respond to repeated stress by showing atrophy that leads to memory impairment, whereas neurons in amygdala show a growth response that leads to increased anxiety and aggression. Yet, these are not necessarily "damaged" and may be treatable with the right medications. The mechanisms that distinguish between protection and damage of brain cells from stress are discussed in this context.