This review summaries recent evidence from clinical and basic science studies on estrogen central nervous system. For decades, estrogen was thought of only as a "sex hormone" and plays a fundamental role in regulating behavioral and physiological events. In recent years, accumulated evidence shows that estrogen also plays very important roles in the brain. Recent basic science studies show that estrogen treatment decreases the neuronal response to various forms of insult through the regulation of both estrogen synthesis and estrogen receptor expression in the brain. Some clinical evidence also suggests that estrogen deprivation might be implicated as a risk factor in various neurodegenerative diseases. Estrogen may play a neuroprotective role through estrogen dependent alterations in cell survival, enhancement of synaptic transmission and neurogenesis. Some of the mechanisms underlying these effects are independent of the classical nuclear estrogen receptors and involve direct modulation of neurotransmitter receptor function, or anti-oxidant activities of estrogen. It is controversial whether estrogen is indicated in the prevention or treatment of various brain disorders such as Alzheimer's disease. The conflicting findings suggest that several variables, including age, estrogen dose and formulation, the length of treatment, may determine whether the potential benefits of estrogen treatment would outweigh the associated risks.