Neonatal exposure to high doses of estrogen results in permanent suppression of prostate growth and reduced sensitivity to androgens in adulthood. It is unclear whether alterations in prostate growth are due to a direct effect of estrogens on the gland or are the result of hypothalamic-pituitary-gonadal axis suppression and a subsequent reduction in androgen levels. Therefore, the aim of this study was to determine whether estrogens have a direct effect on the prostate using a defined method of culturing neonatal prostates. Newborn rat ventral prostates were microdissected and cultured in the presence of testosterone, which resulted in branching morphogenesis and ductal canalization. Solid cords of epithelium differentiated into acini lined by tall columnar epithelial cells; these acini were surrounded by stromal cells, expressing smooth muscle alpha-actin. When cultured in the presence of 17beta-estradiol or diethylstilbestrol in addition to testosterone, androgen-induced prostatic growth was reduced, and differentiation was altered. Although estrogen-treated explants were smaller than controls, quantification of epithelial, stromal, and luminal volumes using unbiased stereology revealed significant changes; the proportion of epithelial cells and lumen decreased, and the proportion of stroma increased compared with control values. Concurrent with this reduced growth rate, we observed a disturbance in the branching pattern and a reduction in ductal canalization. Specifically, stromal differentiation and organization were disrupted, so that a discontinuous smooth muscle layer was observed around the epithelial ducts, and epithelial differentiation was altered. The effects of estrogens were not accompanied by a decrease in androgen response via the androgen receptor, because immunolocalization of this receptor remained constant. These data demonstrate that high doses of estrogens are growth inhibitory and have direct effects on prostate development in vitro, which may occur in vivo in addition to indirect effects via suppression of the hypothalamic-pituitary-gonadal axis.