It has been known for more than 30 years that estrogen can alter the intrinsic and synaptic physiology of neurons within minutes. The physiological significance of these acute effects has been unclear, however, because some effects require higher concentrations of estrogen than are detected in plasma, and because estrogen secreted by the ovary rises and falls over a time course of days, not minutes. These concerns may be answered by new research demonstrating that estrogen is produced at high levels within the brain itself, and that production of estrogen in the brain may be regulated by neuronal activity. Additionally, recent studies indicate that classical estrogen receptor proteins are found not only in the nucleus where they regulate gene expression but also at extranuclear sites, including at synapses. These findings, together with evidence for new types of extranuclear estrogen receptors, suggest that estrogen might act directly at synapses to activate second messenger signaling, thereby rapidly altering neuronal excitability, synaptic transmission, and/or synaptic plasticity.