To dissect the molecular and cellular basis of sexual differentiation of the teleost brain, which maintains marked sexual plasticity throughout life, we examined sex differences in neural expression of all subtypes of nuclear oestrogen and androgen receptors (ER and AR) in medaka. All receptors were differentially expressed between the sexes in specific nuclei in the forebrain. The most pronounced sex differences were found in several nuclei in the ventral telencephalic and preoptic areas, where ER and AR expression were prominent in females but almost completely absent in males, indicating that these nuclei represent female-specific target sites for both oestrogen and androgen in the brain. Subsequent analyses revealed that the female-specific expression of ER and AR is not under the direct control of sex-linked genes but is instead regulated positively by oestrogen and negatively by androgen in a transient and reversible manner. Taken together, the present study demonstrates that sex-specific target sites for both oestrogen and androgen occur in the brain as a result of the activational effects of gonadal steroids. The consequent sex-specific but reversible steroid sensitivity of the adult brain probably contributes substantially to the process of sexual differentiation and the persistent sexual plasticity of the teleost brain.