Although synthesis of estrogen by male gonads has been well documented for over half a century, it is only recently that the role of estrogen in male reproductive events has gained appreciation. We recently reported abundant expression of estrogen receptor (ER)-alpha and -beta in different cell types of the rat penis, whose levels diminished with advancing age. The present study, which builds on data from the ER study, was designed to determine whether the penis is capable of generating its own local estrogen by examining evidence of the expression of aromatase, a microsomal enzymatic complex which irreversibly converts androgens to estrogens, using immunohistochemistry, Western blotting, in situ hybridization and real-time PCR analyses. Secondly, the effects of sex steroid hormones on penile aromatase were examined. Discrete aromatase immunoreactive cells were localized in primordial corpus cavernosum, corpus spongiosus and os penis, blood vessels and sensory corpuscle of glans penis. In situ hybridization signals corresponded with immunohistochemical findings. Western blot, enzyme immunoassay and real-time PCR analyses of rat penile samples revealed an age-dependent expression of aromatase and estrogen, with levels at week 1 almost resembling those of the ovary, but they decreased sharply by week 8, and decreased further by week 35. This expression pattern was strikingly similar to that of ER-alpha reported previously. Testosterone and diethylstilbesterol administered prenatally upregulate levels of aromatase mRNA and protein, and estrogen postnatally. Dihydrotestosterone upregulated aromatase mRNA and protein, but not estrogen. We conclude that estrogen acts via ER in a paracrine and/or autocrine manner to regulate penile events, particularly during development, and that estrogen synthesis is regulated by estrogen and androgens.