Estrogen receptor (ER) binds to estrogen response elements in target genes and recruits a coactivator complex of CBP-pl60 that mediates stimulation of transcription. ER also activates transcription at AP-1 sites that bind the Jun/Fos transcription factors, but not ER. We review the evidence regarding mechanisms whereby ER increases the activity of Jun/Fos and propose two pathways of ER action depending on the ER (alpha or beta) and on the ligand. We propose that estrogen-ERalpha complexes use their activation functions (AF-1 and AF-2) to bind to the p 160 component of the coactivator complex recruited by Jun/Fos and trigger the coactivator to a higher state of activity. We propose that selective estrogen receptor modulator (SERM) complexes with ERbeta and with truncated ERalpha derivatives use their DNA binding domain to titrate histone deacetylase (HDAC)-repressor complexes away from the Jun/Fos coactivator complex, thereby allowing unfettered activity of the coactivators. Finally, we consider the possible physiological significance of ER action at AP-1 sites.