To estimate the influence of estrogen on the functional development of the central nervous system during the neonatal period, several doses of estradiol‐17β (E2) were treated to cultured cells from the cerebral cortex of neonatal rats and the acetylcholinesterase (AChE) activity was examined. E2 was added to give the following final concentrations: 0, 10−10, 10−9, and 10−8 M. After 72 h of incubation, all cells were obtained from dishes to determine the AChE activity. Although apparent morphological changes were not observed among treatments cultured for 72 h, E2 suppressed dose‐dependently the spontaneous increase of AChE activity in cerebral cells. Furthermore, a single dose of tamoxifen, an E2 receptor binding molecule with agonist and antagonist properties, also acted in a similar manner as E2. These findings suggest that the functional development of the cerebral cortex, at least the cholinergic system, during the neonatal period is regulated by E2.