Prothymosin alpha (PTalpha) is a small highly acidic protein found in the nuclei of virtually all mammalian tissues. Its high conservation in mammals and wide tissue distribution suggest an essential biological role. While the exact mechanism of action of PTalpha remains elusive, the one constant has been its relationship with the proliferative state of the cell and its requirement for cellular growth and survival. Recently PTalpha was found to promote transcriptional activity by sequestering the anticoactivator, REA from the Estrogen Receptor (ER) complex. We now report that Estradiol (E2) upregulates PTalpha mRNA and protein expression. Further studies indicate that ERalpha regulates PTalpha gene transcriptional activity. We have also delimited the region of PTalpha gene promoter involved in ERalpha-mediated transcriptional regulation and identified a novel ERalpha-binding element. Increased intracellular PTalpha expression in the presence of estrogens is accompanied by increased nuclear/decreased cytoplasmic localization. Increased nuclear expression of PTalpha is correlated with increased proliferation as measured by expression of Ki67 nuclear antigen. Conversely, inhibition of nuclear PTalpha expression in breast cancer cells using antisense methodology resulted in the inhibition of E2-induced breast cancer cell proliferation. Overall these studies underscore the importance of PTalpha in estrogen-induced breast cell proliferation.