Event-related potentials (ERPs) and behavioral ratings were collected from 30 female subjects who were exposed to picture slides. The slides belonged to five affective categories whose content was babies, dermatological cases, ordinary people, male models, and female models. Based on the day of testing relative to their menstrual cycle, the subjects were grouped according to their expected levels of androgens, estrogen, or progesterone. The data were examined to determine whether any ERP component or behavioral rating (non-erotic/erotic, unpleasant/pleasant, simple/complex, and low arousal/high arousal) varied as a function of subjects' hormone defined menstrual phase. Only the P3 component was sensitive to menstrual phase. The P3 to babies and male models was largest when progesterone levels were high. High progesterone was also associated with a decrease in the complexity and eroticism of all slide categories. An increase in the pleasantness of all categories was evident when estrogen levels were high. The results are interpreted as support for an “adaptive context updating” theory of the P3 component of ERPs.