We report evidence for the existence of a unique nucleus in the rat hypothalamus. This nerve cell group is situated in the interstitial area between the arcuate nucleus and ventromedial nucleus of the hypothalamus, and is primarily oriented sagittally, in a spindle shape. This nucleus was a well defined structure in Nissl-stained sections because of its location in an otherwise cell-poor zone. This sagittalis nucleus of the hypothalamus (SGN) exhibits significant sex differences in its volume and cell numbers, as defined by Nissl staining and estrogen receptor (ER) alpha immunoreactivity (ir), being significantly larger in males than in females. Treatment of neonatal females with testosterone eliminated these sex differences. It is noteworthy that adult female rats have estrous cycle-related variations in the ERalpha-ir cell distribution, decreasing during the proestrus phase of the cycle. Pharmacological experiments demonstrated that the single injection of estradiol benzoate had a significant effect on the ERalpha-ir cell count, suggesting the hormonal responsiveness of SGN neurons. This unique hypothalamic nucleus with its morphological sex differences and hormonal responsiveness is embedded in a region important for the regulation of endocrine functions and sexual behaviors.