In the late 1980s, the finding that the dentate gyrus contains more granule cells in the male than in the female of certain mouse strains provided the first indication that the dentate gyrus is a significant target for the effects of sex steroids during development. Gonadal hormones also play a crucial role in shaping the function and morphology of the adult brain. Besides reproduction-related processes, sex steroids participate in higher brain operations such as cognition and mood, in which the hippocampus is a critical mediator. Being part of the hippocampal formation, the dentate gyrus is naturally involved in these mechanisms and as such, this structure is also a critical target for the activational effects of sex steroids. These activational effects are the results of three major types of steroid-mediated actions. Sex steroids modulate the function of dentate neurons under normal conditions. In addition, recent research suggests that hormone-induced cellular plasticity may play a larger role than previously thought, particularly in the dentate gyrus. Specifically, the regulation of dentate gyrus neurogenesis and synaptic remodeling by sex steroids received increasing attention lately. Finally, the dentate gyrus is influenced by gonadal hormones in the context of cellular injury, and the work in this area demonstrates that gonadal hormones have neuroprotective potential. The expression of estrogen, progestin and androgen receptors in the dentate gyrus suggests that sex steroids, which could be of gonadal origin and/or synthesized locally in the dentate gyrus, may act directly on dentate cells. In addition, gonadal hormones could also influence the dentate gyrus indirectly, by subcortical hormone-sensitive structures such as the cholinergic septohippocampal system. Importantly, these three sex steroid-related themes, functional effects in the normal dentate gyrus, mechanisms involving neurogenesis and synaptic remodeling, as well as neuroprotection, have substantial implications for understanding normal cognitive function, with clinical importance for epilepsy, Alzheimer's disease and mental disorders.