Neurosteroids are synthesized in the brain and modulate brain excitability. There is increasing evidence of their sedative, anesthetic and antiseizure properties, as well as their influence on mood. Currently neurosteroids are classified as pregnane neurosteroids (allopregnanolone and allotetrahydrodeoxycorticosterone), androstane neurosteroids (androstanediol and etiocholanone) or sulfated neurosteroids (pregnenolone sulfate and dehydroepiandrosterone sulfate). Both preclinical and clinical findings indicate that progesterone derivative neurosteroids such as allopregnanolone and allotetrahydrodeoxycorticosterone play a role in mood disorders. Clozapine and olanzapine, which were shown to be effective in stabilizing bipolar disorder, elevate pregnenolone levels in rat hippocampus, cerebral cortex, and serum. In lithium-treated mice, the blood levels of allopregnanolone and pregnenolone were elevated compared to control levels. Women diagnosed with bipolar disorder typically show symptomatic exacerbation in relation to the menstrual cycle, and show vulnerability to the onset or recurrence of mood disorders immediately after giving birth, when the levels of neurosteroid derivatives of progesterone drop. Whereas in women who had recovered from bipolar disorder, the plasma concentration of allopregnanolone was elevated compared to either healthy controls or women with major depressive disorder during the premenstrual period. During depressive episodes, blood level of allopregnanolone is low. Treatment with fluoxetine tends to stabilize the levels of neurosteroids in depression. These findings converge to suggest that these steroids have significant mood-stabilizing effect. This hypothesis is consistent with the observation that a number of anticonvulsants are effective therapies for bipolar disorder, a finding also consistent with the antiseizure properties of neurosteroids. Further exploration of action of neuroactive steroids is likely to open new frontiers in the investigation of the etiology and treatment of mood disorders, particularly bipolar disorders.