Estrogen plays an important role in normal physiology. It is also a risk factor for breast cancer, and antiestrogen therapies have been shown to be effective in the treatment and prevention of breast cancers. The liver is important for estrogen metabolism, and a compromised liver function has been linked to hyperestrogenism in patients. In this report, we showed that the liver X receptor (LXR) controls estrogen homeostasis by regulating the basal and inducible hepatic expression of estrogen sulfotransferase (Est, or Sult1e1), an enzyme critical for metabolic estrogen deactivation. Genetic or pharmacological activation of LXR resulted in Est induction, which in turn inhibited estrogen-dependent uterine epithelial cell proliferation and gene expression, as well as breast cancer growth in a nude mouse model of tumorigenicity. We further established that Est is a transcriptional target of LXR, and deletion of the Est gene in mice abolished the LXR effect on estrogen deprivation. Interestingly, Est regulation by LXR appeared to be liver specific, further underscoring the role of liver in estrogen metabolism. Activation of LXR failed to induce other major estrogen-metabolizing enzymes, suggesting that the LXR effect on estrogen metabolism is Est specific. In summary, our results have revealed a novel mechanism controlling estrogen homeostasis in vivo and may have implications for drug development in the treatment of breast cancer and other estrogen-related cancerous endocrine disorders.