Recent research demonstrates rapid neurotransmitter-like estradiol signaling in the brain. This form of neuronal communication is supported by findings that the estrogen synthetic enzyme aromatase is present within presynaptic terminals of the vertebrate CNS and is subject to rapid regulation. Previous work on zebra finch neural aromatase provides evidence for phosphorylation-dependent inhibition of activity as well as evidence for phosphorylation-dependent stimulation of activity. To clarify this discrepancy, in the present study we use in vitro assays to measure aromatase activity in homogenates or partially purified fractions of male zebra finch HP and NCM and examined the effects of acid phosphatase (AP) on aromatase activity under various phosphorylating conditions. We report that under low or modest phosphorylating conditions, AP causes an increase in basal aromatase activity, whereas in the presence of high phosphorylating conditions, aromatase activity is inhibited by AP. Furthermore, our data suggests that AP acts by direct dephosphorylation of the Y361 residue of aromatase.