The term neurosteroids applies to those steroids that are both synthesized in the nervous system, either de novo from cholesterol or from steroid hormone precursors, and that accumulate in the nervous system to levels that are at least in part independent of steroidogenic gland secretion rates. Glial cells play a major role in neurosteroid formation and metabolism. Several neurosteroids are involved in either auto- or paracrine mechanisms involving both regulation of target gene expression and effects on membrane receptors (including those of neurotransmitters). The neuromodulatory role of neurosteroids in regulating the estrous cycle and pregnancy, stress, memory, and developmental as well as aging processes awaits further investigation.