Prolactin-secreting pituitary tumors can be induced in young rats through prolonged estrogen treatment. Recent evidence suggests that such tumors are associated with a degeneration of tuberoinfundibular dopaminergic (TI-DA) neurons, which normally inhibit prolactin secretion by the anterior pituitary’s lactrotrophs. For this study, chronic hyperprolactinemia was induced in young, ovariectomized Fischer 344 rats through Silastic capsule implants of 17β-estradiol, placed subcutaneously for 1 month prior to removal. Rats with such estrogen-induced hyperprolactinemia then received transplants of neonatal arcuate-median eminence (ME) tissue (containing TI-DA neurons) or amygdala (control) tissue, placed either within the third ventricle or bilaterally within the hypothalamus. Blood samples were obtained 1 month after transplantation and prolactin concentrations measured by radioimmunoassay. Two of 4 animals receiving ventricularly-placed arcuate-ME transplants and 4 of 7 animals receiving bilateral arcuate-ME transplants showed substantial reductions in plasma prolactin levels compared to mean values in control animals. Follow-up catecholamine (CA) histochemistry indicated a bright fluorescence intensity in the median eminence of animals bearing effective arcuate-ME transplants; this, in contrast to the weak CA fluorescence intensity within the median eminence of animals remaining hyperprolactinemic with ineffective transplants. Furthermore, in sharp contrast to the very low, nonpulsatile LH levels found during a second bleeding in recipients bearing ineffective transplants, recipients with effective arcuate-ME transplants had the high, pulsatile levels of LH characteristic of normal, ovariectomized rats. These data suggest that developing TI-DA neurons, within effective arcuate-ME transplants, became functional to reinstate or accentuate DA inhibition of prolactin secretion and, in so doing, indirectly normalized LH secretion as we