The brain is an established target for peripheral steroids, but also expresses steroidogenic enzymes and is capable of de novo ‘sex’ steroid synthesis (neurosteroidogenesis) independent of peripheral steroidogenic organs. In adrenalectomized and ovariectomized rats that do not have peripheral sources of steroids, estrogen treatment increased progesterone levels specifically in the hypothalamus, indicating that estrogen stimulates progesterone neurosteroidogenesis. Recent studies have demonstrated that specific cell types preferentially secrete specific steroids, and that astrocytes are the primary progesterone synthesizing cells in the nervous system. We hypothesized that estrogen could directly induce de novo synthesis of progesterone in astrocytes. To determine whether estrogen stimulates progesterone synthesis in astrocytes, astrocyte-enriched cultures were grown to confluence, then grown for an additional 48 h in an estrogen- and phenol-free Dulbecco’s Modified Eagle Medium (DMEM) and then treated with either 17β-estradiol or steroid-free media. After culturing for 48 h in steroid-free, phenol red-free DMEM, low levels of progesterone were detected in the media, whereas progesterone levels were significantly increased in the media of astrocytes cultured in DMEM with 17β-estradiol (10^–7–10^–4<i>M</i>). To determine whether estrogen regulated the mRNA expression of progesterone synthetic enzymes, P-450 side-chain cleavage and 3β-hydroxysteroid dehydrogenase, control and 17β-estradiol-treated astrocytes were harvested and prepared for Northern and slot blot analysis. Expression levels of enzyme mRNAs were very low and 17β-estradiol did not significantly increase mRNA levels of either steroidogenic enzyme. These results suggest that estrogen directly stimulated the de novo synthesis of neuroprogesterone in astrocytes, and demonstrate the potential for estrogen to regulate reproductive physiology and behavior through the paracrine actions of astrocyte-derived progesterone.