The decline in estrogen levels during menopause is associated with increased cytokine production and inflammatory diseases. Estrogens exert anti-inflammatory effects by repressing cytokine genes, such as tumor necrosis factor-alpha (TNFalpha). The mechanisms involved in transcriptional repression by estrogens are virtually unknown. Here, we used chromatin immunoprecipitation to investigate how estrogens repress the autoinduction of the TNFalpha gene. TNFalpha assembled a transcriptional activation complex at the TNFalpha promoter that includes c-jun, p50-NFkappaB, p65-NFkappaB, CBP, Hsp90, and unliganded estrogen receptor (ER). Estradiol repressed TNFalpha gene expression by reversing the ligand-independent activation by ERalpha and the stimulatory actions of c-jun, NFkappaB, and CBP on transcription. Silencing of GRIP1 reversed the repression of TNFalpha and other cytokine genes by estradiol, demonstrating that GRIP1 is required for transcriptional repression and can act as a corepressor. Our study demonstrates that ERalpha is a TNFalpha-induced coactivator that becomes a repressor in the presence of estradiol by recruiting GRIP1.