The discovery of a second estrogen receptor (ER), called ERbeta, in 1996 sparked intense interest within the scientific community to discover its role in mediating estrogen action. However, despite more than 6 yr of research into the function of this receptor, its physiological role in mediating estrogen action remains unclear and controversial. We have developed a series of highly selective agonists for ERbeta and have characterized their activity in several clinically relevant rodent models of human disease. The activity of one such compound, ERB-041, is reported here. We conclude from these studies that ERbeta does not mediate the bone-sparing activity of estrogen on the rat skeleton and that it does not affect ovulation or ovariectomy-induced weight gain. In addition, these compounds are nonuterotrophic and nonmammotrophic. However, ERB-041 has a dramatic beneficial effect in the HLA-B27 transgenic rat model of inflammatory bowel disease and the Lewis rat adjuvant-induced arthritis model. Daily oral doses as low as 1 mg/kg reverse the chronic diarrhea of HLA-B27 transgenic rats and dramatically improve histological disease scores in the colon. The same dosing regimen in the therapeutic adjuvant-induced arthritis model reduces joint scores from 12 (maximal inflammation) to 1 over a period of 10 d. Synovitis and Mankin (articular cartilage) histological scores are also significantly lowered (50-75%). These data suggest that one function of ERbeta may be to modulate the immune response, and that ERbeta-selective ligands may be therapeutically useful agents to treat chronic intestinal and joint inflammation.