The estrogen receptors (ERs), ERalpha and ERbeta, play a central role in mediating the biological effects of estrogen. The transcription rate of estrogen target genes is determined by several parameters including the type of ligand, estrogen receptor subtype and isoform, as well as interactions with receptor-binding cofactor proteins. The ERs regulate gene expression by binding to specific response element sequences in the promoters of estrogen target genes. Alternative pathways have also been described in which the ERs modulate transcription indirectly, via protein : protein interactions. In this regulatory mode, which has been traced to activator protein (AP)-1-, cyclic adenosine monophosphate (cAMP)-, and Sp1-response elements, the ERs appear to be tethered to target gene promoters via heterologous transcription factors. It has been found that ERalpha and ERbeta have opposite effects on transcription mediated via the indirect mode of action. Moreover, recent studies suggest that ERbeta may inhibit the stimulatory effects of ERalpha on cellular proliferation. Estrogen is a key regulatory hormone that affects numerous physiological processes. Estrogen is required for female pubertal development and affects growth, differentiation and function of the female reproductive system. It has recently been suggested that estrogen also has an important role in the male urogenital tract. In addition, estrogens have profound effects in other tissues. For instance, in the skeleton estrogen prevents bone-resorption by inhibition of osteoclast function. Numerous reports have suggested that estrogen has a beneficial effect in the cardiovascular system and in the CNS; however, this has not been confirmed in randomized clinical trials. In fact, a large randomized trial on healthy postmenopausal women receiving oral estrogen plus progestin showed an increased incidence of cardiovascular disease. In addition, this study revealed an increased risk for dementia and impaired cognitive function in the group receiving oral estrogen/progestin. Additional clinical trials are required to determine which hormonal component causes these health risks or whether the effects were due to the combination of estrogen and progestin.