Aromatase is an enzyme that converts androgen to estrogen in the gonads and also at extragonadal sites, including the brain. In this study we developed a transgenic mouse that carries an enhanced green fluorescent protein (EGFP) gene inducible by estrogen through an estrogen response element to facilitate detection of estrogen actions in vivo. The expression of EGFP in aromatase-deficient (Ar(-/-)) female mice was significantly suppressed at the pituitary gland, ovary, uterus, and gonadal fat pad and was induced by dietary 17beta-estradiol to wild-type (Ar(+/+)) levels or higher. These results demonstrate that the expression of the EGFP gene is tissue selective and estrogen dependent in vivo. Employing this transgenic mouse, we examined whether estrogen synthesis in the extragonadal sites is necessary for reproduction in female mice. When ovaries of Ar(-/-) mice were replaced with Ar(+/+) ovaries, a significant induction of EGFP expression in the pituitary gland and uterus was observed. Histological examinations showed the presence of antral follicles in the replaced ovaries, indicating that the transplants are functional in Ar(-/-) mice. After crossing with males, three of 10 Ar(-/-)females with Ar(+/+) ovaries became pregnant and fed their pups. Collectively, these observations indicate that estrogen synthesis in the ovary is sufficient for supporting female reproduction, and that infertility of Ar(-/-) females is primarily due to a defect in estrogen synthesis in the ovary.