It is now clear that oestrogens are not only circulating reproductive hormones, but that they also have neurotransmitter-like properties in a wide range of brain circuits. The view of oestrogens as intrinsic neuromodulators that shape behaviour has been bolstered by a series of recent developments from multiple vertebrate model systems. Here, we review several recent findings from studies of songbirds showing how the identified neural circuits that govern auditory processing and sensorimotor integration are modulated by the local and acute production of oestrogens. First, studies using in vivo microdialysis demonstrate that oestrogens fluctuate in the auditory cortex (30-min time bin resolution) when songbirds are hearing song and interacting with conspecifics. Second, oestrogens rapidly boost the auditory-evoked activity of neurones in the same auditory cortical region, enhancing auditory processing. Third, local pharmacological blockade of oestrogen signalling in this region impairs auditory neuronal responsiveness, as well as behavioural song preferences. Fourth, the rapid actions of oestrogens that occur within the auditory cortex can propagate downstream (trans-synaptically) to sensorimotor circuits to enhance the neural representation of song. Lastly, we present new evidence showing that the receptor for the rapid actions of oestradiol is likely in neuronal membranes, and that traditional nuclear oestrogen receptor agonists do not mimic these rapid actions. Broadly speaking, many of these findings are observed in both males and females, emphasising the fundamental importance of oestrogens in neural circuit function. Together, these and other emergent studies provide support for rapid, brain-derived oestrogen signalling in regulating sensorimotor integration, learning and perception.