Large subcutaneous doses (2 mg/21 days) of estradiol valerate (EV) given over several months will induce a prolactin and growth hormone-secreting pituitary tumor in female rats. The medial basal hypothalami (MBHs) of such EV-treated animals were examined at different time intervals with light and electron microscopes to determine whether EV affects the MBH and to relate any observed effects to the process of tumorigenesis. The MBHs of extensively treated rats exhibited profound glial and neuronal changes. The filament content of astrocytes was greatly increased and large dense pleomorphic inclusions filled both astrocytic perikarya and processes. Degenerating neuronal elements have been observed in the neuropil of extensively treated animals. Dark cells identified as M cells were seen to engage in phagocytosis and were loaded with dense inclusions. Some neurons in MBH contained large quantities of lipofuscin that was different in appearance from that of normal females of the same age. The glial reaction developed gradually. At earlier stages of EV treatment there were fewer reactive glia and these contained fewer inclusions. Myelin figures often occurred in these early inclusions. Reactive glia in EV-treated rats did not appear in the preoptic area, dorsomedial nucleus or lateral hypothalamus but were found in ventromedial nucleus. Retired breeders and starvation-stressed rats resembled normal controls. These pathological changes in MBH may result from a direct effect of EV on the hypothalamus. It is possible that, in addition to its effects on the hypophysis, EV suppresses or injures hypophysiotropic cells in MBH, thus releasing pituitary chromophobes from inhibitory hypothalamic influences. This could result in hypersecretion and neoplasia.