Estrogen synthesis from C19 precursors is catalyzed by aromatase cytochrome P450. Overexpression of aromatase through atypical promoter usage (use of promoter II) in adipose tissue contributes to breast cancer development and progression. One tumor-derived factor that appears to contribute to this process is prostaglandin E2 (PGE2). A factor that regulates aromatase expression downstream of PGE2 is liver receptor homolog-1 (LRH-1). In a study of factors that inhibit LRH-1, we have examined the ability of short heterodimer partner (SHP) to inhibit aromatase transcription mediated by LRH-1 in preadipocytes. RT-PCR analysis indicated that both LRH-1 and SHP are expressed in human preadipocytes. To assess the effect of SHP on aromatase transcription, a transient transfection system was established using 3T3-L1 preadipocytes. Expression of SHP completely inhibited activity of an aromatase promoter II reporter gene induced by LRH-1. The combined treatment of forskolin and phorbol ester (which mimic PGE2) as well as LRH-1, which maximally induced reporter gene expression (140-fold), was also completely inhibited by SHP. This effect of SHP was mediated by inhibition of LRH-1 transcriptional activity, as measured by activity of GAL4-LRH-1 fusion constructs, and by inhibition of LRH-1 binding to promoter II. We conclude that SHP is a potent inhibitor of aromatase transcription in preadipocytes. Modulation of SHP expression and/or activity in adipose tissue may therefore have significant effects on aromatase expression and estrogen production in breast adipose tissue.