Diencephalic tissue containing median eminence and hypothalamus has been dissected from human male fetuses at 10 and 22 weeks. In vitro incubation of homogenates showed conversion of androstenedione-4-14C to estrone and estradiol by these tissues but not by control cerebral cortex. Aromatization by diencephalic tissue is consistent with the thesis that androgens may be converted at the central level and that “androgen” effects may be mediated via aromatized products (estrogens).