Information on oestrogen action has grown exponentially in the past decade, and recent studies have begun to define the mechanism of ligand‐dependent activation and cell‐specific effects. Oestrogen‐mediated gene transcription in a specific tissue depends on several factors, the most important of which is the presence of at least one of the two nuclear oestrogen receptor (ER) isoforms, ERα and ERβ. The presence and levels of specific ER isoform variants, along with receptor coactivator, corepressor and integrator proteins, directly modulate overall nuclear ER activity. The structure of the ligand, including both physiological oestrogens and synthetic oestrogen receptor modulators, influences ER interactions with these other proteins and thus determines the biological response. Furthermore, peptide and neurotransmitter‐stimulated intracellular signalling pathways activate specific enzyme cascades and may modify the receptors and their interacting proteins, resulting in either independent or ligand‐enhanced ER‐mediated responses. Finally, several rapid effects of oestrogen probably occur at the membrane through nongenomic pathways that may or may not require the same ER proteins that are found in the nucleus. This review concentrates on the pituitary‐hypothalamic axis and the genomic effects of oestrogen, and discusses the current knowledge of each of these factors in determining oestrogen actions in the neuroendocrine system.