A role for apolipoprotein E is implicated in regeneration of synaptic circuitry after neural injury. The in vitro mouse organotypic hippocampal slice culture system shows Timm's stained mossy fiber sprouting into the dentate gyrus molecular layer in response to deafferentation of the entorhinal cortex. We show that cultures derived from apolipoprotein E knockout mice are defective in this sprouting response; specifically, they show no sprouting in the dorsal region of the dentate gyrus, yet retain sprouting in the ventral region. Dorsal but not ventral sprouting in cultures from C57B1/6J mice is increased 75% by treatment with 100 pM 17beta-estradiol; this response is blocked by both progesterone and tamoxifen. These results show that neuronal sprouting is increased by estrogen in the same region where sprouting is dependent on apolipoprotein E. Sprouting may be stimulated by estrogen through its up-regulation of apolipoprotein E expression leading to increased recycling of membrane lipids for use by sprouting neurons. Estrogen and apolipoprotein E may therefore interact in their modulation of both Alzheimer's disease risk and recovery from CNS injury.