The results of clinical and basic research conducted over the past two decades have implicated a role for oestrogen in modulating cognitive function. This review focuses on what the results of research using female rodent models have revealed about the effects of oestrogen on mammalian cognition. Increased levels of oestrogen are associated with increased dendritic spine and synapse density in the hippocampus, a brain area important for learning and memory. However, the role of oestrogen in the modulation of performance on tasks of learning and memory is complex because it exerts enhancing effects on some tasks and impairing effects on others. Hypotheses have been offered to explain these varied actions, including differentiating the effects of oestrogen on cognitive processes required to complete tasks and analysing the influence of fluctuating levels of oestrogen on the strategies selected by animals to solve tasks. It is proposed that, when these hypotheses are viewed together and within the context of oestrogen action in the hippocampus and potentially other brain areas, a framework for understanding the varied effects of oestrogen on cognition emerges. The hippocampal-dependent memory system supports the flexible expression of memories and the hippocampal-independent memory system supports development of individual representations. Because of the effects exerted by oestrogen on the structure and function of the hippocampus, it would be expected to enhance performance across a variety of tasks that require hippocampal-dependent flexible expression of memories and would not enhance performance on tasks that involve hippocampal-independent individual representations. This review offers a theoretical model by which the divergent results of studies assessing the role of oestrogen on cognition can be reconciled and suggests that effects of oestrogen on cognition are best understood within the framework of oestrogen action in the brain and the role of those brain areas affected by oestrogen in the mediation of learning and memory.