Several 3 alpha-hydroxysteroids accumulate in the brain after local synthesis or after metabolization of steroids that are provided by the adrenals. The 3 alpha-hydroxy ring A-reduced pregnane steroids allopregnanolone and tetrahydrodeoxycorticosterone are believed not to interact with intracellular receptors, but enhance GABA-mediated chloride currents. The present study shows that these neuroactive steroids can regulate gene expression via the progesterone receptor. The induction of DNA binding and transcriptional activation of the progesterone receptor requires intracellular oxidation of the neuroactive steroids into progesterone receptor active 5 alpha-pregnane steroids. Thus, at physiological concentrations, these neuroactive steroids regulate neuronal function through their effects on both transmitter-gated ion channels and steroid receptor-regulated gene expression.