Neurosteroids may play a major role in the regulation of various neurophysiological and behavioural processes. However, while the biochemical pathways involved in the synthesis of neuroactive steroids in the central nervous system are now elucidated, the mechanisms controlling the activity of neurosteroid-producing cells remain almost completely unknown. In the present study, we have investigated the effect of the octadecaneuropeptide (ODN), an endogenous ligand of benzodiazepine receptors, in the control of steroid biosynthesis in the frog hypothalamus. Glial cells containing ODN-like immunoreactivity were found to send their thick processes in the close vicinity of neurones expressing the steroidogenic enzyme 3β-hydroxysteroid dehydrogenase. Exposure of frog hypothalamic explants to graded concentrations of ODN (10−10−10−5m) produced a dose-dependent increase in the conversion of tritiated pregnenolone into various radioactive steroids, including 17-hydroxypregnenolone, progesterone, 17-hydroxyprogesterone, dehydroepiandrosterone and dihydrotestosterone. The ODN-induced stimulation of neurosteroid biosynthesis was mimicked by the central-type benzodiazepine receptor (CBR) inverse agonists methyl β-carboline-3-carboxylate (β-CCM) and methyl 6,7-dimethoxy-4-ethyl-β-carboline-3-carboxylate (DMCM). The stimulatory effects of ODN, β-CCM and DMCM on steroid formation was markedly reduced by the CBR antagonist flumazenil. The ODN-evoked stimulation of neurosteroid production was also significantly attenuated by GABA. Collectively, these data indicate that the endozepine ODN, released by glial cell processes in the vicinity of 3β-hydroxysteroid dehydrogenase-containing neurones, stimulates the biosynthesis of neurosteroids through activation of central-type benzodiazepines receptors.