A wealth of data collected in recent decades has demonstrated that ovarian sex-steroid hormones, particularly 17β-estradiol (E2), are important trophic factors that regulate the function of cognitive regions of the brain such as the hippocampus. The loss of hormone cycling at menopause is associated with cognitive decline and dementia in women, and the onset of memory decline in animal models. However, hormone therapy is not currently recommended to prevent or treat cognitive decline, in part because of its detrimental side effects. In this article, it is proposed that investigations of the rapid effects of E2 on hippocampal function be used to further the design of new drugs that mimic the beneficial effects of E2 on memory without the side effects of current therapies. A conceptual model is presented for elucidating the molecular and biochemical mechanisms through which sex-steroid hormones modulate memory, and a specific hypothesis is proposed to account for the rapid memory-enhancing effects of E2. Empirical support for this hypothesis is discussed as a means of stimulating the consideration of new directions for the development of hormone-based therapies to preserve memory function in menopausal women.