Endocrine disruption associated with reproductive failure has been reported previously in female perch (Perca fluviatilis) and roach (Rutilus rutilus) from Lake Molnbyggen in Sweden and in female brook trout (Salvelinus fontinalis) from Vadbäcken, a stream emptying into Molnbyggen. Both Molnbyggen and Vadbäcken have been contaminated by toxic leachate from a municipal refuse dump. In this study, female perch were caught in Molnbyggen and the reference lake, Lake Djursjön, to further investigate the endocrine mechanism behind the significant numbers of sexually immature (SIM) female perch in Molnbyggen. Blood plasma analysis of progesterone (P), 17alpha-hydroxyprogesterone (17alpha-OHP), testosterone (T), and 17beta-oestradiol (E2), as well as analysis of brain aromatase activity (P450arom), were carried out. The exceptional high numbers of SIM female perch in Molnbyggen was confirmed in February 1999. In July 1999, at an early stage of oogenesis, perch from Molnbyggen showed significantly decreased gonadosomatic index (GSI) and aromatase activity. The presence of aromatase inhibiting substances in lake sediments were therefore tested in vitro. The aromatase activity was dose-dependently inhibited by clotrimazole, reaching 50% inhibition at a concentration of 0.9 microM. Aromatase inhibiting substances were found both in Molnbyggen and reference sediment extracts, indicating that they were naturally occurring substances and not of anthrophogenic origin. The similar decrease in levels of circulating steroids (P, 17alpha-OHP, T, and E2), aromatase, and GSI therefore suggest that the low aromatase activity is due to down-regulation rather than inhibition. To further investigate the steroidogenesis prior to T, P, and 17alpha-OHP were analysed in perch caught in 1997 and 1998 in Lakes Molnbyggen, Kvarntjärn (downstream), Yxen (upstream), and Djursjön, in female roach caught in Molnbyggen and Djursjön in 1997, and in brook trout caught in Vadbäcken and the reference stream Björntjärnsbäcken in 1998. The absence of differences in P and 17alpha-OHP levels, combined with a significantly lower T level in female perch and roach from Molnbyggen in 1997, could be the result of either increased metabolism and excretion of T, or a disruption downstream of 17alpha-OHP formation. The unaffected P levels and significantly lower 17alpha-OHP levels, together with significantly decreased T and E2 levels, found in adult (>45g) female brook trout from Vadbäcken, further indicated that an altered steroidogenesis downstream of P is one possible mechanism underlying the low T levels and thus the high number of SIM female fish, since too low T levels might be insufficient to activate the brain-pituitary-gonadal axis.