Effects of gonadal steroids on numbers of neurons containing estrogen receptor (ER) and/or substance P (SP) were examined in the anteroventral periventricular nucleus (AVPV) of female and male rats by double-labeling immunohistochemistry employing antibodies specific for ER and SP. Animals were gonadectomized and received subcutaneously either oil alone (Control group), sequential injections of estradiol benzoate and oil (EB + Oil group), or those of EB and progesterone (EB + P group). In the female control rat, a large population of ER-immunoreactive (in) cells were found clustered throughout the AVPV. They were counted more than 2,000 in total of 4 sections in this nucleus. On the contrary, SP-IR neurons were scarcely observed in the same area of this group. Administration of estrogen to female animals decreased the total number of ER-IR cells to 67% of the control group. In contrast to the suppressive effect of estrogen to its own receptor, it induced SP-IR neurons in the AVPV of the female. Approximately 50-80 SP-IR neurons were counted in the 4 sections, and 59% of these neurons expressed ER-IR material in their nuclei. In the female EB + P group, the number of ER-IR neurons also decreased to 79% of the control group. Although the number of SP-IR neurons in this group decreased to 32% of that in the EB + Oil group, a ratio of coexistence of ER-IR material in these neurons increased to 75%. The male control group contained a smaller population of ER-IR cells relative to the female control (1497 vs 2143). SP-IR neurons were rarely observed as were in the female control. Administration of estrogen to the male also decreased the number of ER-IR cells in a manner similar to that in the female. However, unlike the female, the steroid failed to induce the SP-IR neurons in the male. These results demonstrate sexual dimorphism in the AVPV not only in the number of ER-IR neurons but also in the responsiveness of SP neurons to estrogen. They further provide anatomical evidence that a subset of SP neurons are regulated by estradiol in estrogen sensitive neurons in the female rat, The data also suggest that this peptide is involved in mechanisms of luteinizing hormone surge by mediating actions of gonadal steroids in the AVPV.