Estrogens are the primary female sex hormones and play important roles in both reproductive and non-reproductive systems. Estrogens can be synthesized in non-reproductive tissues such as liver, heart, muscle, bone and the brain. During the past decade, increasing evidence suggests that brain estrogen can not only be synthesized by neurons, but also by astrocytes. Brain estrogen also works locally at the site of synthesis in paracrine and/or intracrine fashion to maintain important tissue-specific functions. Here, we will focus on the biology of brain estrogen and its impact on cognitive function and Alzheimer’s disease. This comprehensive review provides new insights into brain estrogens by presenting a better understanding of the tissue-specific estrogen effects and their roles in healthy ageing and cognitive function.