In this study, we established an in vitro model system for the study of developmental regulation of steroid enzyme expression in the perinatal brain. Single cell suspensions were prepared from the hypothalamic-olfactory tubercle region of 18-day-old rat fetuses, and aggregates were formed by incubation under constant rotation. On day 0, 3, 6, or 12 of culture, aggregates were incubated for 4 or 20 h with 3H-progesterone (P4) and the profile of 3H-steroids in the medium analyzed. Five major metabolites were formed from 3H-P4: 5 alpha-pregnan-3, 20-dione (DHP), 3 alpha-hydroxy-5 alpha-pregnan-20-one (3 alpha-OH-DHP), 3 beta-hydroxy-5 alpha-pregnan-20-one (3 beta-OH-DHP), and two unidentified polar substances designated A and B. Progressively with aggregate-age in culture, there was a decrease in the relative amounts of 3H-P4 recovered in the medium and a sequential increase in DHP, 3 beta-OH-DHP, 3 alpha-OH-DHP, A and B. Aggregates maintained in a chemically defined, serum-free medium metabolized P4 at an accelerated rate compared to those maintained in serum. An inhibitor of the enzyme 5 alpha-reductase completely inhibited P4 metabolism, indicating that 5 alpha-reduction is the primary step in this pathway. Thus, the aggregates express three key enzymes in P4 metabolism: 5 alpha-reductase, 3 alpha- and 3 beta-hydroxysteroid oxidoreductases and the operation of this pathway is proposed: P4----DHP----3 alpha-OH-DHP + 3 beta-OH-DHP; A and B are derived from one or more of the latter three. Hence, this culture system can serve as a model to study regulatory processes in the developing steroidogenic brain.