The classic view of sexual differentiation in mammalian species holds that sex differences in the brain and behavior develop under the influence of estrogens derived from the neural aromatization of testosterone: the brain develops as male in the presence of estrogens and as female in their absence. In agreement with this view, it has been proposed that the female brain needs to be protected from estrogens produced by the placenta and that alpha-fetoprotein (AFP) - a major fetal plasma protein present in many developing vertebrate species and produced transiently in great quantities by the hepatocytes of the fetal liver is the most likely candidate to achieve this protection because of its estrogen-binding capacity. However, the idea that the female brain develops in the absence of estrogens and the role of AFP in protecting the brain against the differentiating action of estrogens have been challenged. First, there is accumulating evidence that the normal development of the female brain might actually require the presence of estrogens. Second, the presence of AFP within neurons in the absence of any evidence for local AFP synthesis suggests that AFP is transported from the periphery into the brain. It was thus proposed as well that AFP acts as a carrier, which actively transports estrogens into target brain cells and, by doing so, has an active role in the development of the female brain. The availability of AFP mutant mice (AFP-KO) now finally allowed us to resolve this longstanding controversy concerning the role of AFP in brain sexual differentiation, and thus to determine whether prenatal estrogens contribute to the development of the female brain. We showed that the brain and behavior of female AFP-KO mice were masculinized and defeminized. However, when estrogen production was blocked by fetal treatment with an aromatase inhibitor, the feminine phenotype of these mice was rescued. These results clearly demonstrate that the principal action of prenatal estrogen exposure is to defeminize the brain and that AFP normally binds estradiol circulating in the female fetus and thereby protects the developing brain from defeminization.