In a previous report, we demonstrated in vivo ameliorating effects of conjugated estrogen in women suffering from senile dementia-Alzheimer's type. To investigate the effects of estrogen on the growth of cholinergic neurons, the present study was performed using rat cholinergic tissue implanted into the anterior chamber of the eye. Fetal diagonal band tissue containing cholinergic neurons was grafted into the anterior eye chamber of adult female rats that had either been treated or not with 2 mg estradiol valerate injected every 3 days after oophorectomy. Two and four weeks after transplantation, the axonal and/or dendritic growth of cholinergic neurons in the graft was studied using acetylcholinesterase histochemistry. At both times, acetylcholinesterase positive processes were densely distributed in the grafts of estradiol valerate treated rats, while in rats without estradiol valerate treatment acetylcholinesterase positive reaction was essentially localized only on the cell bodies. These findings were more obvious at 2 weeks after transplantation than at 4 weeks. These results suggest that estrogen acts on cholinergic neurons as a growth factor.