The gonadal steroid 3 alpha-hydroxy-4-pregnen-20-one (3 alpha HP) is a neuroactive steroid with anxiolytic and analgesic actions. In addition, 3 alpha HP has been shown to inhibit GnRH activity on gonadotropes and selectively suppress FSH release from pituitary cells, without an effect on LH. The enzyme 3 alpha-hydroxysteroid dehydrogenase (3 alpha HSD) has been presumed to be the enzyme responsible for the conversion of progesterone to 3 alpha HP, but this has never been confirmed in vitro or in vivo. We have now determined the mechanism of 3 alpha HP synthesis in vivo using specific enzyme inhibitors and in vitro using recombinant proteins. Incubation of [(3)H]progesterone with purified recombinant rat and human 3 alpha HSD isoforms showed that both the rat 3 alpha HSD and the human type 2(brain) 3 alpha HSD converted progesterone to 3 alpha HP. Age-dependent 3 alpha HP production was demonstrated in pituitary and cortex. Incubation of both tissues with indomethacin, a known 3 alpha HSD inhibitor, decreased the conversion of progesterone to 3 alpha HP by at least 70%, indicating that 3 alpha HSD was responsible for this conversion. As human type 2 3 alpha HSD is expressed in a region-specific fashion in the brain, 3 alpha HP may only be made in specific regions of the brain. Furthermore, the data suggest that the pituitary has the capacity for 3 alpha HP production, which may provide an additional mechanism for regulation of GnRH action.