There is evidence for a hypothalamic prolactin (PRL) system that expresses sexually dimorphic traits. The aim of this in vitro study is to gain an insight into the process of sexual differentiation of hypothalamic PRL cells. In particular, we wanted to determine whether sexual differentiation of these cells can occur independently of the surge of gonadal testosterone which, in the male rat embryo, takes place at embryonic day (E) 18 and is commonly believed to start the critical period of sexual differentiation of the brain. Gender-specific cell cultures were prepared from E 14 or E 17 rat diencephalon and raised in the absence of gonadal steroids. After 10 days in vitro, numbers of PRL-immunoreactive (IR) cells and PRL levels were quantified by immunocytochemistry and Western blotting, respectively. Numbers of PRL-IR cells and PRL levels were 2-3 times higher in cultures prepared from female than from male embryos of either age. It is concluded that sexual differentiation of hypothalamic PRL cells starts well before the generally acknowledged onset of the critical period and may proceed independently of the action of gonadal testosterone. Besides gonadal steroids, other mechanisms, such as cell-intrinsic realization of a sex-specific genetic program, may be responsible for initiating the development of sexually dimorphic neuronal phenotypes.