Whereas adult sex differences in brain morphology and behavior result from developmental exposure to steroid hormones, the mechanism by which steroids differentiate the brain is unknown. Studies to date have described subtle sex differences in levels of proteins and neurotransmitters during brain development, but these have lacked explanatory power for the profound sex differences induced by steroids. We report here a major divergence in the response to injection of the gamma-aminobutyric acid type A (GABA(A)) agonist, muscimol, in newborn male and female rats. In females, muscimol treatment primarily decreased the phosphorylation of cAMP response element binding protein (CREB) within the hypothalamus and the CA1 region of the hippocampus. In contrast, muscimol increased the phosphorylation of CREB in males within these same brain regions. Within the arcuate nucleus, muscimol treatment increased the phosphorylation of CREB in both females and males. Thus, the response to GABA can be excitatory or inhibitory on signal-transduction pathways that alter CREB phosphorylation depending on the sex and the region in developing brain. This divergence in response to GABA allows for a previously unknown form of steroid-mediated neuronal plasticity and may be an initial step in establishing sexually dimorphic signal-transduction pathways in developing brain.