Kisspeptin, neurokinin, and dynorphin (KNDy) neurons in the arcuate nucleus (ARC) control luteinizing hormone (LH) and prolactin (PRL) release, although their role in conveying the effects of estradiol (E2) to these hormones is not well understood. We performed a longitudinal evaluation of female rats in which KNDy neurons were ablated using a neurokinin‐3 receptor agonist conjugated with saporin (NK3‐SAP) to investigate the impact of the reduction of KNDy neurons on the E2 regulation of gonadal and PRL axes. NK3‐SAP rats, bearing a moderate loss of ARC kisspeptin‐immunoreactive (‐IR) neurons (50%–90%), displayed irregular estrous cycles but essentially unaltered follicular development and a normal number of corpora lutea. Rats were then ovariectomized (OVX) and treated with a positive‐feedback dose of E2 (OVX + E2). LH and PRL were measured in the tail blood by an enzyme‐linked immunosorbent assay. The E2‐induced LH surge was amplified, whereas the PRL rise was decreased in NK3‐SAP rats compared to Blank‐SAP control. After 10 days of no hormonal treatment, basal LH levels were equally elevated in NK3‐SAP and controls. Tyrosine hydroxylase (TH) phosphorylation in the median eminence, in turn, was increased in NK3‐SAP rats, with no change in the number of ARC TH‐IR neurons. Thus, KNDy neurons exert concurrent and opposite roles in the E2‐induced surges of LH and PRL. The partial loss of KNDy neurons disrupts ovarian cyclicity but does not preclude ovulation, consistent with the disinhibition of the LH preovulatory surge. Conversely, KNDy neurons tonically inhibit the enzymatic activity of tuberoinfundibular dopaminergic neurons, which appears to facilitate PRL release in response to E2. Ablation of KNDy neurons in female rats amplifies LH and attenuates PRL surge induced by estradiol. This is associated with an increase in tyrosine hydroxylase phosphorylation at the median eminence, indicating higher enzymatic activity of tuberoinfundibular dopaminergic neurons.