Estrogen receptor (ER) expression by breast tumors is an important predictor of disease-free survival in breast cancer patients and, more importantly, is a strong predictor of response to endocrine therapy. Variant forms of the ER may play an important role in the loss of hormone responsiveness and the progression to hormone independence. We have examined a panel of human breast tumor cell lines, both ER-positive and ER-negative, and have identified an ER mRNA variant containing a deletion of exon 5 in the ER-negative BT-20 and ER-positive MCF-7 cell lines. This exon 5 deletion variant has been previously reported to be overexpressed in ER-negative/progesterone receptor-positive breast tumors. Using RNase protection analysis, we have found that the predominant ER transcript in the BT-20 cells is the exon 5 deletion variant, while the principal transcript in MCF-7 cells is the wild-type ER mRNA. The variant ER transcript is translated into a truncated receptor protein of approximately M(r) 42,000 when expressed in yeast and, more important, in breast tumor cells. This is the first demonstration of an exon 5 deletion variant ER protein. Functional analysis has shown that this variant ER possesses constitutive transcriptional regulatory activity with respect to an estrogen-regulated reporter gene construct in a yeast expression system. The presence of this ER variant in breast tumor cell lines, as well as breast tumor biopsies and uterine tissue, suggests that it is a naturally occurring variant that may arise by alternative splicing, and whose overexpression may be involved in the progression of breast tumors to a hormone-independent state.