Estrogen has been considered as a key substance that induces sexual differentiation of the brain during fetal and neonatal life in the rat. Thus, to define the brain regions involved in the brain sexual differentiation, we examined the regions where the estrogen receptor (ER) is located in the developing rat brain. We examined immunohistochemical distribution of the cells containing estrogen receptor‐α (ER‐α) in the preoptic region, the diencephalon, and the amygdala in male and female rats on postnatal days 1–35 (PD1–PD35). The antibody used recognizes ER‐α equally well for both occupied and unoccupied forms. ER‐α immunostaining was restricted to the cell nuclei of specific cell groups. In PD1 rats, ER‐α‐immunoreactive (ER‐IR) signals were detected in the lateral septum, the organum vasculosum lamina terminalis, the medial preoptic nucleus (MPN), the median preoptic nucleus, the bed nucleus of the stria terminalis, the hypothalamic periventricular nucleus, the lateral habenula, the posterodorsal part of the medial amygdala nucleus, the posterior part of the cortical amygdala nucleus, the hypothalamic ventromedial nucleus (VMH), the hypothalamic arcuate nucleus, and the posterior hypothalamic periventricular nucleus. The distribution pattern of ER‐IR cells in the newborn rat was much the same as that in the adult in the preoptic‐hypothalamic and amygdala regions. Moreover, the signals in the MPN and the VMH were stronger in the female than in the male, perhaps reflecting the ability of estrogen generated by aromatization of testosterone in the male to down‐regulate the ER signal. Thus, the brain regions showing sex differences may be sites of sexual differentiation of the brain by aromatizable androgen during the neonatal period. J. Comp. Neurol. 389:81–93, 1997. © 1997 Wiley‐Liss, Inc.