Neurosteroids are endogenous or exogenous steroids that can alter neuronal excitability through interacting with ligand-gated ion channels and cell surface receptors. They are classified as inhibitory or excitatory based on their effects. Inhibitory neurosteroids act as positive allosteric modulators of GABAA receptors, while excitatory neurosteroids negatively modulate GABAA receptors or act as agonists of NMDA or sigma-1 receptors. Neurosteroids are involved in processes like neural plasticity, learning and memory, behavior, stress response, and mood disorders. Some synthetic neurosteroids have therapeutic applications as sedatives or for treating epilepsy.