Testosterone produced by the foetal testis is converted by male neurons to oestradiol, which masculinizes neuronal morphology. Female neurons are known to synthesize oestradiol in absence of exogenous testosterone. However, the role of neuronal oestradiol on the differentiation of foetal female neurons is unknown. Here we show that, due to endogenous neuronal oestradiol synthesis, female hippocampal neurons have higher expression of the neuritogenic protein Neurogenin 3 and enhanced neuritogenesis than males. Exogenous application of testosterone or its metabolite dihydrotestosterone increases Neurogenin 3 expression and promotes neuritogenesis in males, but reduces these parameters in females. Together our data indicate that gonadal-independent oestradiol synthesis by female neurons participates in the generation of sex differences in hippocampal neuronal development.