The beneficial influence of E2 in the maintenance of healthy bone is well recognized. However, the way in which the actions of this hormone are mediated is less clearly understood. Western blot analysis of ERalpha in osteoblasts clearly demonstrated that the well characterized 66-kDa ERalpha was only one of the ERalpha isoforms present. Here we describe a 46-kDa isoform of ERalpha, expressed at a level similar to the 66-kDa isoform, that is also present in human primary osteoblasts. This shorter isoform is generated by alternative splicing of an ERalpha gene product, which results in exon 1 being skipped with a start codon in exon 2 used to initiate translation of the protein. Consequently, the transactivation domain AF-1 of this ERalpha isoform is absent. Functional analysis revealed that human (h)ERalpha46 is able to heterodimerize with the full-length ERalpha and also with ERbeta. Further, a DNA-binding complex that corresponds to hERalpha46 is detectable in human osteoblasts. We have shown that hERalpha46 is a strong inhibitor of hERalpha66 when they are coexpressed in the human osteosarcoma cell line SaOs. As a functional consequence, proliferation of the transfected cells is inhibited when increasing amounts of hERalpha46 are cotransfected with hERalpha66. In addition to human bone, the expression of the alternatively spliced ERalpha mRNA variant is also detectable in bone of ERalpha knockout mice. These data suggest that, in osteoblasts, E2 can act in part through an ERalpha isoform that is markedly different from the 66-kDa receptor. The expression of two ERalpha protein isoforms may account, in part, for the differential action that estrogens and estrogen analogs have in different tissues. In particular, the current models of the action of estrogens should be reevaluated to take account of the presence of at least two ERalpha protein isoforms in bone and perhaps in other tissues.