Estradiol acts as a neuromodulator in brain regions important for cognition and sensory processing. Estradiol also shapes brain sex differences but rarely have these concepts been considered simultaneously. In male and female songbirds, estradiol rapidly increases within the auditory forebrain during song exposure and enhances local auditory processing. We tested whether G-protein-coupled estrogen receptor 1 (GPER1), a membrane-bound estrogen receptor, is necessary and sufficient for neuroestrogen regulation of forebrain auditory processing in male and female zebra finches (Taeniopygia guttata). At baseline, we observed that females had elevated single-neuron responses to songs vs males. In males, narrow-spiking (NS) neurons were more responsive to conspecific songs than broad-spiking (BS) neurons, yet cell types were similarly auditory responsive in females. Following acute inactivation of GPER1, auditory responsiveness and coding were suppressed in male NS yet unchanged in female NS and in BS of both sexes. By contrast, GPER1 activation did not mimic previously established estradiol actions in either sex. Lastly, the expression of GPER1 and its coexpression with an inhibitory neuron marker were similarly abundant in males and females, confirming anatomical similarity in the auditory forebrain. In this study, we found: (1) a role for GPER1 in regulating sensory processing and (2) a sex difference in auditory processing of complex vocalizations in a cell type-specific manner. These results reveal sex specificity of a rapid estrogen signaling mechanism in which neuromodulation accounts and/or compensates for brain sex differences, dependent on cell type, in brain regions that are anatomically similar in both sexes.