Although many genes are regulated by estrogen, very few have been shown to directly bind the estrogen receptor complex. Therefore, transcriptional cascades probably occur in which the estrogen receptor directly binds to a target gene that encodes another transcription factor that subsequently regulates additional genes. Through the use of a differential display assay, a transcription factor has been identified that may be involved in estrogen transcriptional cascades. This report demonstrates that transcription factor deltaEF1 is induced eightfold by estrogen in the chick oviduct. Furthermore, the regulation by estrogen occurs at the transcriptional level and is likely to be a direct effect of the estrogen receptor complex, as it does not require concomitant protein synthesis. A putative binding site was identified in the 5'-flanking region of the chick ovalbumin gene identifying it as a possible target gene for regulation by deltaEF1. Characterization of this binding site revealed that deltaEF1 binds to and regulates the chick ovalbumin gene. Thus, a novel regulatory cascade that is triggered by estrogen has been defined.