Neurosteroids were initially defined as steroid hormones locally synthesized within the nervous tissue. Subsequently, they were described as steroid hormone derivatives that devoid hormonal action but still affect neuronal excitability through modulation of ionotropic receptors. Neurosteroids are further subdivided into natural (produced in the brain) and synthetic. Some authors distinguish between hormonal and regular neurosteroids in the group of natural ones. The latter group, including hormone metabolites like allopregnanolone or tetrahydrodeoxycorticosterone, is devoid of hormonal activity. Both hormones and their derivatives share, however, most of the physiological functions. It is usually very difficult to distinguish the effects of hormones and their metabolites. All these substances may influence seizure phenomena and exhibit neuroprotective effects. Neuroprotection offered by steroid hormones may be realized in both genomic and non-genomic mechanisms and involve regulation of the pro- and anti-apoptotic factors expression, intracellular signaling pathways, neurotransmission, oxidative, and inflammatory processes. Since regular neurosteroids show no affinity for steroid receptors, they may act only in a non-genomic mode. Multiple studies have been conducted so far to show efficacy of neurosteroids in the treatment of the central and peripheral nervous system injury, ischemia, neurodegenerative diseases, or seizures. In this review we focused primarily on neurosteroid mechanisms of action and their role in the process of neurodegeneration. Most of the data refers to results obtained in experimental studies. However, it should be realized that knowledge about neuroactive steroids remains still incomplete and requires confirmation in clinical conditions.