Estrogen has profound effects on function and plasticity of the nervous system. Receptors for estrogen (ERs) are expressed by neurons in several areas of the brain. Here we demonstrate that embryonic and adult rat neural stem cells (NSC) express ERalpha and ERbeta, 17beta-Estradiol treatment decreased the proliferation of NSC stimulated by epidermal growth factor (EGF), which was due to the upregulation of the cyclin-dependent kinase (CDK) inhibitor, p21(Cip1). The modulatory effect of 17beta-estradiol on EGF was more pronounced in adult NSC. However, 17beta-estradiol alone increased the proliferation of embryonic, but not adult, NSC. The effect of 17beta-estradiol was inhibited by the ER antagonist, ICI-182780, showing an involvement of ERs. 17beta-Estradiol also increased the ratio of neurons to glia cells in embryonic NSC, but not in adult NSC, suggesting an influence on neurogenesis during embryonic development. The data show that estrogen, via ER, affects the proliferation and differentiation of NSC cells, probably acting in conjunction with other factors governing NSC development.