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Sex differences in the structure and organization of the corpus callosum (CC) can be attributed to genetic, hormonal or environmental effects, or a combination of these factors. To address the role of gonadal hormones on axon myelination, functional axon conduction and immunohistochemistry analysis of the CC in intact, gonadectomized and hormone-replaced gonadectomized animals were used. These groups were subjected to cuprizone diet-induced demyelination followed by remyelination. The myelinated component of callosal compound action potential was significantly decreased in ovariectomized and castrated animals under normal myelinating condition. Compared to gonadally intact cohorts, both gonadectomized groups displayed more severe demyelination and inhibited remyelination. Castration in males was more deleterious than ovariectomy in females. Callosal conduction in estradiol-supplemented ovariectomized females was significantly increased during normal myelination, less attenuated during demyelination, and increased beyond placebo-treated ovariectomized or intact female levels during remyelination. In castrated males, the non-aromatizing steroid dihydrotestosterone was less efficient than testosterone and estradiol in restoring normal myelination/axon conduction and remyelination to levels of intact males. Furthermore, in both sexes, estradiol supplementation in gonadectomized groups increased the number of oligodendrocytes. These studies suggest an essential role of estradiol to promote efficient CC myelination and axon conduction in both sexes.