Biosynthesis of the neuropeptide vasopressin (VP) in extrahypothalamic neurons is dependent on circulating levels of testosterone (T). However, the mechanism by which endogenous or peripherally administered T induces VP gene expression in the brain has not been established. This study investigated the effects of androgens and estrogen in the steroid-dependent expression of VP mRNA in the bed nucleus of the stria terminalis (BNST). Testosterone, estrogen, and the T metabolite, dihydrotestosterone (DHT), were either peripherally administered or locally implanted in cannula into the BNST of castrated male rats to determine whether these steroids influence VP gene expression through a local effect within the nucleus itself. The results indicate that T does act locally within the BNST, since complete restoration of VP mRNA levels occurred in BNST neurons in the vicinity of T-containing cannulas but not on the contralateral side. In addition, both DHT and estrogen were partially effective in stimulating VP gene expression in the BNST, and in combination, synergized to produce the full complement of VP gene expression induced by T itself.