Sexual neurosteroids (SN), namely 17β-estradiol (E2) and 5α-dehydrotestosterone (DHT), are synthesized in the hippocampus, where they induce circuit modifications by changing the number of excitatory spine synapses in a paracrine and sex-specific manner. The mechanisms of this sex-specific synapse turnover, which are likely to affect cognitive functions, are poorly understood. We found that hippocampal neurons synthesize estradiol, which maintains LTP and synapses in females but not in males. In females, inhibition of estradiol synthesis results in impairment of LTP and synapse loss. These effects were not seen in males. The essential role of local estrogen on the stability and maintenance of connectivity in the hippocampus is consistent with age-related cognitive decline in women after menopause. In male animals the regulation of synaptic stability and plasticity by locally synthesized sexual steroids remains to be clarified. This article is part of a Special Issue entitled SI: Brain and Memory.