Raised testosterone, however, was not associated with cognitive decline or dementia in 2,300 Japanese-American men who were aged 70-91 years.
Concentrations of the two sex hormones were determined from blood samples collected between 1991 and 1993 when the men were free from dementia.
Over the next six years, the men underwent two tests of cognitive ability.
During follow-up, 223 were diagnosed with dementia, including 134 cases of Alzheimer's disease.
Analysis showed that for every one standard deviation increase in bioavailable oestradiol, the risk for Alzheimer's increased by 25 per cent. Cognitive ability was also reduced in men with higher levels of oestradiol, compared with those with low levels of the hormone.
Previous research showed that postmenopausal women with high oestrogen levels also had an increased risk of dementia.
High oestrogen levels may be a consequence or an early marker of the disease rather than a cause, the researchers suggested.
High levels of oestradiol may be produced by increased activity of the aromatase enzyme in the brain, which is associated with neurodegeneration.
Alternatively, it may be a by-product of neurodegeneration itself.
Ann Neurol (Online) 2006