We investigated the effects of gonadal hormone replacement on the pulsatile parameters underlying basal circadian corticosterone secretion in castrated male and ovariectomized female rats using an automated sampling system. Blood was collected from freely moving, unanaesthetized rats every 10 min over a 24‐h period and sampling was continued during a noise stress and after lipopolysaccharide (LPS) administration. Castrated male rats had markedly higher corticosterone levels than intact controls. This was reflected by increased number and frequency of pulses in addition to an increase in the pulse height and amplitude under both basal circadian and stress conditions. Hormone replacement with either testosterone or dihydrotestosterone returned these corticosterone levels and circadian profile to those found in intact males, confirming an androgen‐mediated effect. Ovariectomized females had significantly lower basal and stress‐induced corticosterone levels with lower frequency and amplitude of corticosterone pulses than intact females. 17β‐oestradiol replacement returned basal levels, pulsatile measurements and stress‐induced corticosterone levels to those found in intact females. Three hours post‐LPS administration, castrated males demonstrated significantly higher values of parvocellular paraventricular nucleus (PVN) arginine vasopressin and corticotrophin‐releasing factor and anterior pituitary pro‐opiomelanocortin mRNA while ovariectomized females showed significantly lower levels of all three transcripts compared to intact controls. PVN glucocorticoid receptor mRNA levels 3 h post‐LPS administration were significantly decreased in castrated males and significantly increased in ovariectomized female rats. Replacement of gonadal steroids resulted in a return to the levels found in intact controls after LPS. Gonadal steroid replacement is sufficient to reverse changes in the pulsatile characteristics of corticosterone release after gonadectomy. In addition, gonadal steroid replacement reverses stress‐induced alterations in hypothalamic‐pituitary‐adrenal (HPA) activity. These data demonstrate a major contribution of gonadal steroids to the regulation of HPA axis activity and to the pulsatile characteristics of corticosterone release.