Sex-specific behaviors are in part based on hormonal regulation of brain physiology. This functional magnetic resonance imaging (fMRI) study demonstrated significant differences in activation of hypothalamic-pituitary-adrenal (HPA) circuitry in adult women with attenuation during ovulation and increased activation during early follicular phase. Twelve normal premenopausal women were scanned twice during the early follicular menstrual cycle phase compared with late follicular/midcycle, using negative valence/high arousal versus neutral visual stimuli, validated by concomitant electrodermal activity (EDA). Significantly greater magnitude of blood oxygenation level-dependent signal changes were found during early follicular compared with midcycle timing in central amygdala, paraventricular and ventromedial hypothalamic nuclei, hippocampus, orbitofrontal cortex (OFC), anterior cingulate gyrus (aCING), and peripeduncular nucleus of the brainstem, a network of regions implicated in the stress response. Arousal (EDA) correlated positively with brain activity in amygdala, OFC, and aCING during midcycle but not in early follicular, suggesting less cortical control of amygdala during early follicular, when arousal was increased. This is the first evidence suggesting that estrogen may likely attenuate arousal in women via cortical-subcortical control within HPA circuitry. Findings have important implications for normal sex-specific physiological functioning and may contribute to understanding higher rates of mood and anxiety disorders in women and differential sensitivity to trauma than men.