Introduction: Neurons expressing estrogen receptor (ER) ɑ in the arcuate (ARC) and ventromedial (VMH) nuclei of the hypothalamus sex-specifically control energy homeostasis, sexual behavior, and bone density. Females have more ERɑ neurons in the VMH and ARC than males, and the sex difference in the VMH is eliminated by neonatal treatment with testosterone or a DNA methylation inhibitor. Objective: Here, we tested the roles of testosterone and DNA methylation/demethylation in development of ERɑ in the ARC. Methods: ERɑ was examined at birth and weaning in mice that received vehicle or testosterone subcutaneously, and vehicle or DNA methyltransferase inhibitor intracerebroventricularly, as neonates. To examine effects of DNA demethylation on the ERɑ cell number in the ARC, mice were treated neonatally with small interfering RNAs against ten-eleven translocase enzymes. The methylation status of the ERɑ gene (Esr1) was determined in the ARC and VMH using pyrosequencing of bisulfite-converted DNA. Results: A sex difference in ERɑ in the ARC, favoring females, developed between birth and weaning and was due to programming effects of testosterone. Neonatal inhibition of DNA methylation decreased ERɑ in the ARC of females, and an inhibition of <underline>de</underline>methylation increased ERɑ in the ARC of males. The promoter region of Esr1 exhibited a small sex difference in percent of total methylation in the ARC (females > males) that was opposite to that in the VMH (males > females). Conclusion: DNA methylation and demethylation regulate ERɑ cell number in the ARC, and methylation correlates with activation of Esr1 in this region.