Androgens and estrogens affect the performance on certain cognitive tests, particularly those measuring verbal fluency and mental rotation. Their effects on cognition have frequently been attributed to changes in cerebral lateralization. This study tested the impact of a reversal of the sex steroid milieu on cerebral activation and lateralization during verbal and spatial tasks in transsexuals. fMRI scans were obtained from 6 female-to-male and 8 male-to-female transsexuals at baseline and after cross-sex steroid treatment. Activation was measured during language and mental rotation tasks. Language activation increased after sex steroid treatment in both groups (F(1,12) =3.7, p=0.08), and total language activity was correlated to post-treatment estradiol levels (rho=0.54, p=0.05). Lateralization was not affected by the reversal of sex steroid milieus (F(1,12)=1.47, p=0.25). Activation during mental rotation did not increase during treatment (F(1,12)=0.54, p=0.34), but post-treatment testosterone levels correlated to total activation during mental rotation (rho=0.64, p=0.01). Findings suggest that sex steroids may influence cerebral activation, but lateralization remains stable.