Gonadal steroids play an important role in exerting functional sexual differentiation of the brain. Recently there has been accumulating evidence that gonadal steroids regulate neuron number, axonal and dendritic growth and synapse formation in the neuronal system containing sex steroid receptors. These provide morphological bases for sexually dimorphic function of the brain. Other than in the developmental process, gonadal steroids are found to take care of neuronal plasticity in certain brain areas.