In the 1980s particular endogenous metabolites of progesterone and of deoxycorticosterone were revealed to be potent, efficacious, positive allosteric modulators (PAMs) of the GABAA receptor (GABAAR). These reports were followed by the discovery that such steroids may be synthesised not only in peripheral endocrine glands, but locally in the central nervous system (CNS), to potentially act as paracrine, or autocrine "neurosteroid" messengers, thereby fine tuning neuronal inhibition. These discoveries triggered enthusiasm to elucidate the physiological role of such neurosteroids and explore whether their levels may be perturbed in particular psychiatric and neurological disorders. In preclinical studies the GABAAR-active steroids were shown to exhibit anxiolytic, anticonvulsant, analgesic and sedative properties and at relatively high doses to induce a state of general anaesthesia. Collectively, these findings encouraged efforts to investigate the therapeutic potential of neurosteroids and related synthetic analogues. However, following over 30 years of investigation, realising their possible medical potential has proved challenging. The recent FDA approval for the natural neurosteroid allopregnanolone (brexanolone) to treat postpartum depression (PPD) should trigger renewed enthusiasm for neurosteroid research. Here we focus on the influence of neuroactive steroids on GABA-ergic signalling and on the challenges faced in developing such steroids as anaesthetics, sedatives, analgesics, anticonvulsants, antidepressants and as treatments for neurodegenerative disorders.