This article reviews changes in sexual function in middle-aged women and discusses how these changes relate to aging, hormone alterations, and psychosocial and physical factors. A Medline search of population-based studies that measured sexual function, menopausal status and/or hormone levels was conducted. Longitudinal findings are from the Melbourne Women’s Midlife Health Project, a population-based sample of 438 Australian-born white women, aged 45 to 55 years, who were menstruating at baseline. Annual assessments included hormone levels and the Short Personal Experiences Questionnaire. Few of the population-based studies of the menopausal transition measured sexual function or hormones. Aging and the length of the woman’s relationship with her partner are associated with decline in sexual function. An additional decrement in sexual function occurs in midlife associated with menopause. Findings from the Melbourne Women’s Midlife Health Project using structural equation modeling, found the most important factors influencing a woman’s sexual function are prior level of sexual function; losing or gaining a sexual partner; feelings toward a partner; and estradiol level. When psychosocial and lifestyle status were added to the model, mood was the only additional variable affecting sexual function. There is a decline in all aspects of female sexual function with age. A further incremental decline in most aspects of sexual function occurs as women pass through the menopausal transition and is related to decreasing estradiol levels. Other factors such as prior sexual function and partner issues have larger effects on women’s sexual function than do hormonal factors.