Aromatase activity was measured in explant cultures from the newborn mouse and rat brain and in homogenates of regions of the rat brain sampled between birth and 51 days of age. Conversion of 19-[3H]hydroxy-androstenedione to estradiol and estrone was detected in explant cultures from the mouse preoptic/septal region, anterior cingulate cortex, and midbrain, as well as from the rat preoptic area, septum, hippocampus, anterior cingulate cortex, and midbrain central grey. No detectable estrogen biosynthesis was observed in explants from the cerebellum and spinal cord of either species. Measurements of aromatase in tissue homogenates using 1 beta[3H]androstenedione as substrate revealed detectable enzyme activity in the hypothalamus + preoptic area, amygdala, hippocampus, anterior cingulate cortex, and midbrain, from birth onward. Aromatase activity per milligram of tissue protein was highest in the hypothalamus-preoptic area and amygdala, followed by the hippocampus, midbrain, and cingulate cortex. In all brain regions, aromatase activity was markedly higher at Postnatal Days 1 and 7 than later in life. In both the cingulate cortex and the hippocampus, aromatase was barely detectable above the assay blank in adult (51 day) animals. These results demonstrate that regions of the developing rodent neo- and archicortex have the capacity to convert androgen to estrogen, consistent with a role for local estrogen biosynthesis in the sexual differentiation of higher brain functions.