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Postpartum depression (PPD) is the most common unrecognized complication of childbirth and affects 1 out of 7 childbearing women. Although conventional pharmacologic and psychotherapeutic antidepressant treatments are effective for PPD, a natural alternative may be preferred by postpartum women, especially those who breastfeed their infants. The treatment of PPD with synthetic forms of naturally occurring estrogen is mechanistically appealing because PPD occurs in the context of estrogen withdrawal at parturition. Preliminary evidence suggests that PPD is a disorder of hormone-related mood dysregulation (similar to perimenopausal depression) that can be effectively treated with estrogen. This review provides the basic science and clinical background as well as safety considerations to support the application of transdermal estradiol as a treatment for PPD. We conclude that estradiol treatment for PPD requires confirmation of efficacy in a randomized clinical trial before routine clinical use as monotherapy. Additional data regarding maternal tolerability of cyclic progestins, long-term safety of estradiol treatment, estradiol passage into breast milk and infants, and interdisciplinary collaboration among psychiatrists and gynecologists is also needed before estradiol is used in women who decline or fail to respond to first-line antidepressant treatments, or as an augmentation of conventional antidepressant treatment.