The steroid, 17beta-oestradiol (E(2)) has pervasive psychological and physical effects throughout the lifespan. The question arises as to whether there are divergent oestrogen receptor (ER)-mediated mechanisms for these effects in the central nervous system (CNS) and periphery. This review focuses on results of studies using a whole animal model (i.e. female rats and mice) to investigate the relative effects and mechanisms of oestrogens in the CNS and the periphery. By using this approach, it has been possible to differentiate the enhancing effects of E(2) on behavioural processes mediated by the hippocampus, such as affective behaviour, and the trophic effects that increase tumourigenesis and uterine growth. Studies using pharmacological manipulations and knockout mice suggest that a likely mechanism underlying the beneficial effects of E(2) for hippocampal function (but not proliferative effects in the body) involves actions at ERbeta, changes in cell cycle/division (e.g. cyclin D1) and/or histone modifications. Thus, it may be possible to differentiate the beneficial effects of oestrogens through ERbeta, particularly in the CNS, from the negative proliferative effects on peripheral, E(2)-sensitive tissues.