Neurosteroids play an important role as endogenous neuromodulators that are locally produced in the central nervous system and rapidly change the excitability of neurons and the activation of microglial cells and astrocytes. Here we review the mechanisms of synthesis, metabolism, and actions of neurosteroids in the central nervous system. Neurosteroids are able to play a variety of roles in the central nervous system under physiological conditions by binding to membrane ion channels and receptors such as gamma-aminobutyric acid type A receptors, Nmethyl- D-aspartate receptors, L- and T-type calcium channels, and sigma-1 receptors. In addition, numerous neurological disorders, including persistent neuropathic pain, multiple sclerosis, and seizures, have altered the levels of neurosteroids in the central nervous system. Thus, we review how local synthesis and metabolism of neurosteroids are modulated in the central nervous system and describe the role of neurosteroids under pathological conditions. Furthermore, we discuss whether neurosteroids may play a role as a new therapeutic for the treatment of neurological disorders.