In most vertebrates studied, males have more vasopressin (VP) cells in the bed nucleus of the stria terminalis (BNST) and denser projections from these cells than do females. This sex difference is established perinatally and maintained in adulthood by steroid hormones. The mechanisms of hormone action, however, remain unknown. Previous studies have eliminated differential cell birth, migration, and cell death as likely factors, leaving cell phenotypic differentiation as the most likely mechanism. We hypothesized that hormones influence vasopressin expression through epigenetic mechanisms. We, therefore, manipulated the balance between histone acetylation and deacetylation by treating animals with the histone deacetylase inhibitor valproic acid (VPA) during a critical time for sexual differentiation. Males and females were given 50mg/kg VPA or saline on postnatal days 1 and 2. Animals were sacrificed in adulthood and their brains were processed for vasopressin immunoreactivity. As predicted, males had greater vasopressin innervation in the lateral septum than females. VPA treatment increased vasopressin in the lateral septum in females but had no effect in males, thereby reducing but not eliminating the sex difference. There was no effect of sex or VPA treatment on vasopressin immunoreactivity in the anterior paraventicular nucleus of the thalamus, which receives its innervation from the suprachiasmatic nucleus. These results suggest that histone acetylation contributes to the sexual differentiation of vasopressin expression.