Although neuropeptide-Y (NPY)-containing neurons are widely distributed in the hypothalamus, castration decreased NPY concentrations only in the median eminence (ME), arcuate nucleus (ARC), and ventromedial nucleus (VMN). We have now examined the effects of testosterone (T) replacement in 2-week castrated male rats on NPY levels in hypothalamic and preoptic area regions and in vitro NPY release in three experiments. In the first experiment we studied the effect of T on NPY concentration in castrated rats. Two-week castrated rats were implanted sc with T-filled or empty Silastic capsules 30 mm in length. Ten days later rats were killed, and NPY levels were measured by RIA in microdissected sites. T implants raised serum T levels to the range found in gonad-intact rats and decreased serum LH levels to the basal range. Further, of the six brain sites examined, significant increases in NPY concentrations occurred selectively in the ME, ARC, and VMN of T-implanted rats. In the second experiment, the ability of T to reverse the effect of castration on NPY levels compared to those in intact (sham) rats was assessed. Again, castration decreased NPY levels in the ME, ARC, and VMN only, and replacement of physiological levels of T restored NPY levels approximately 100%, 127%, and 74% in the ARC, VMN, and ME, respectively. In the third experiment, the effect of castration and T implants (30-mm T capsules for 10 days) to 2-week castrated rats on the in vitro release of NPY from medial basal hypothalamus (MBH) was assessed. Basal NPY release was not significantly changed after castration and T replacement. However, in response to a 30-min pulse of KCl (45 mM) NPY release from the MBH of castrated rats was significantly reduced compared to that in intact and T-replaced castrated rats. These studies show that castration decreases and T replacement restores NPY levels selectively in three hypothalamic sites, viz. ME, ARC, and VMN, and KCl-induced NPY release from the MBH in vitro is decreased after castration and restored by T replacement, thereby suggesting that a local subset of androgen-concentrating neurons may regulate NPY levels and release in a site-specific manner. Further, these results are in line with our emerging view that gonadal steroids modulate neurosecretion not only of LHRH, but also of other functionally linked regulatory peptides.