Several lines of evidence suggest that hormonal changes after menopause may play an important role in the incidence of cognitive dysfunction, and also in the development of Alzheimer's disease. In this study, we investigated the effect of estrogen on cognitive function in rats under different stress environment. Female rats were divided into four groups: two groups were ovariectomized (OVX) and two were sham-operated. One group each of OVX and sham rats was kept in a normal environment, and the other groups were assigned to a daily restraint stress (6 h/day) for 21 days from 2 months after the operation. Following the stress period, subjects were tested for performance in novel object recognition test and then used for morphological and neurochemical analyses. The OVX plus stress (OVX/stress) group showed a significant impairment of recognition of novel objects, compared with the other groups. The OVX/stress group also showed a marked decrease in the number of pyramidal cells of the CA3 region and levels of brain-derived neurotrophic factor mRNA in the hippocampus. We further examined the effect of estrogen against cognitive dysfunction and hippocampal changes of OVX/stress rats. Vehicle or 17beta-estradiol (E2) at 20 microg/day was s.c. administered to OVX/stress rats from 2 days before the stress period to the end of behavioral analysis through an implantable osmotic pump. Chronic E2 treatment decreased stress response and improved the cognitive and morphological impairments relative to vehicle group. These data have important implications for cognition enhancing effect of estrogen treatment in postmenopausal women.