Menopause is associated with physiological and psychological changes that influence sexuality. During menopause, the primary biological change is a decrease in circulating estrogen levels. Estrogen deficiency initially accounts for altered bleeding and diminished vaginal lubrication. Continual estrogen loss often leads to numerous signs and symptoms, including changes in the vascular and urogenital systems. Alterations in mood, sleep, and cognitive functioning are common as well. These changes may contribute to lower self-esteem, poorer self-image, and diminished sexual responsiveness and sexual desire. Other important nonhormonal factors that affect sexuality are health status and current medications, changes in or dissatisfaction with the partner relationship, social status, and cultural attitudes toward older women. The problems in sexual functioning related to estrogen deficiency can be treated with hormone therapy that includes estrogens alone and estrogens combined with androgens. Vaginal lubricants and moisturizers also may be useful in ameliorating postmenopausal sexual complaints. This article reviews the literature on the impact of menopausal estrogen loss on sexuality and on the effect of hormone therapy on sexual function during menopause.