Neurosteroids (steroids synthesized in the CNS) function by modulating neurotransmission. To establish an experimental model for investigation of neurosteroid synthesis and regulation, independent of blood-borne steroids, we examined the steroidogenic activity of isolated rat retinas. We identified progesterone, pregnenolone, dehydroepiandrosterone, desoxycorticosterone, 3 alpha,5 alpha-tetrahydrodesoxycorticosterone, 3 alpha-hydroxy-5 alpha-dihydroprogesterone, 17-hydroxyprogesterone, and 17-hydroxypregnenolone together with their esterified forms. As pregnenolone is the precursor of all steroids, its formation was studied in detail as an index of a steroid-synthesizing tissue. Pregnenolone was identified further by gas chromatography coupled to mass spectrometry, and its in vitro synthesis was inhibited by lovastatin, an inhibitor of mevalonolactone and cholesterol biosynthesis. We then examined pregnenolone synthesis in the presence of mevalonolactone as a precursor of sterol formation together with lovastatin, which reduces endogenous mevalonolactone synthesis, as well as with inhibitors of pregnenolone metabolism. The incorporation of mevalonolactone into pregnenolone and its sulfate ester was time- and concentration-dependent and blocked by aminoglutethimide, a competitive inhibitor of cytochrome P450 side-chain cleavage (P450scc) enzyme. Immunocytochemical studies with a specific antibody to P450scc revealed a primary localization of the enzyme at the retinal ganglion cell layer. A less pronounced immunostaining was also seen at cells of the inner nuclear layer. Compounds known to stimulate cyclic AMP content also stimulated pregnenolone formation by rat retinas. These results demonstrate that rat retinas synthesize steroids and, for the first time, they reveal the steroidogenic ability of neuronal cells. We propose rat retinas as an in vitro model system to study neurosteroidogenesis in the CNS.