In addition to the well-known genomic effects of steroid molecules via intracellular steroid receptors, certain steroids rapidly alter neuronal excitability through interaction with neurotransmitter-gated ion channels. Several of these steroids accumulate in the brain after local synthesis or after metabolism of adrenal steroids. The 3 alpha-hydroxy ring A-reduced pregnane steroids allopregnanolone and tetrahydrodeoxycorticosterone have been thought not to interact with intracellular receptors but enhance 7-aminobutyric acid (GABA)-mediated chloride currents, whereas pregnenolone sulfate and dehydroepiandrosterone (DHEA) sulfate display functional antagonistic properties at GABAA receptors. We demonstrated that these neuroactive steroids can regulate also gene expression via the progesterone receptor after intracellular oxidation. Thus, in physiological concentrations these neuroactive steroids regulate neuronal function through their concurrent influence on transmitter-gated ion channels and gene expression. When administered in animal studies, memory enhancing effects have been shown for pregnenolone sulfate and DHEA. The 3 alpha-hydroxy ring A-reduced neuroactive steroids predominantly display anxiolytic, anticonvulsant and hypnotic activities. Sleep studies evaluating the effects of progesterone as a precursor molecule for these neuroactive steroids revealed a sleep EEG pattern similar to that obtained by the administration of benzodiazepines. These findings extend the concept of "cross-talk" between membrane and nuclear hormone effects and provide a new role for the therapeutic application of these steroids in neurology and psychiatry.