The aromatase enzyme (estrogen synthetase) catalyzes the conversion of testosterone to estrogen in peripheral and central nervous tissue. Light and electron microscopic immunocytochemistry was used to study the localization of this enzyme in the septal area of adult male and female albino rats. Aromatase-immunoreactivity was found restricted to neuronal somata and dendritic arbors, and no sex differences were detected in its distribution or intensity. Most aromatase-immunoreactive neurons formed two oblique bands in the lateral and the medial zones of the lateral septum; in addition, labeled cells were present in the septohippocampal nucleus and the laterodorsal portion of the bed nucleus of the stria terminalis. Electron microscopy revealed that the majority of aromatase-positive neurons in the lateral septum exhibit somatic spines, a characteristic marker of a neuron population that is known to contribute to local and extraseptal projections. The presence of aromatase in lateral septal somatospiny neurons suggests that estrogen formed by these neurons may be critically involved in the septal control of steroid-dependent behaviors.