Human female fatty marrow from the femur and iliac crest has the ability to convert androgen to estrogen. Homogenates of fatty marrow incubated with 19-[6,7-3H]hydroxyandrostenedione (19-hydroxyandrost-4-ene-3,17-dione) and an NADPH-generating system produced estrogen in all six samples. The major estrogen produced in five of the cases was [3H]estrone, the immediate product of the aromatizaton of 19-hydroxyandrostenedione. One case produced [3H]estradiol. The local formation of estrogens in bone marrow may be important to the closure of the epiphyses at puberty and may affect osteoporosis at the menopause.