Gonadal steroid hormones influence CNS functioning through a variety of different mechanisms. To test the hypothesis that estrogen modulates synaptic plasticity in the hippocampus, in vitro hippocampal slices from 2-mo-old Sprague-Dawley male rats were used to determine the effect of 17beta-estradiol on both N-methyl-D-aspartate (NMDA) receptor-mediated excitatory postsynaptic potentials (EPSPs) through intracellular recordings and long-term potentiation (LTP) through extracellular recordings. Intracellular EPSPs and extracellular field EPSPs (fEPSPs) were recorded from CA1 pyramidal cells by stimulating Schaffer collateral fibers. In intracellular experiments, slices were perfused with medium containing bicuculline (5 microM) and low Mg2+ (0.1 mM) to enhance the NMDA receptor-mediated currents and 6, 7-dinitroquinoxaline-2,3-dione (DNQX) (10 microM) to block the alpha-amino-3-hydroxy-5-methyl-4-isoxazoleproprianate (AMPA) receptor-mediated component. The effects of 17beta-estradiol on NMDA receptor-mediated activity were excitatory; concentrations >10 nM induced seizure activity, and lower concentrations (1 nM) markedly increased the amplitude of NMDA-mediated EPSPs (both the first and second responses increased during paired pulse stimulation by 180 and 197%, respectively). In extracellular experiments, slices perfused with 17beta-estradiol (100 pM) exhibited a pronounced, persisting, and significant enhancement of LTP of both the fEPSP slope (192%) and fEPSP amplitude (177%) compared with control slices (fEPSP slope = 155%; fEPSP amplitude = 156%) 30 min after high-frequency stimulation. These data demonstrate that estrogen enhances NMDA receptor-mediated currents and promotes an enhancement of LTP magnitude.