Estradiol (E2) acts through the estrogen receptor (ER) to downregulate many genes, and tamoxifen (Tam) largely reverses this repression but the underlying mechanisms are unclear. Repression of the folate receptor (FR)-alpha P4 core promoter by ER is enhanced by E2 and reversed by Tam. This effect was unaffected by inhibition of new protein synthesis and required the E/F and the DNA-binding domains of ER without direct binding of ER to DNA. The repression by E2/ER was not specific for either Sp1 or TATA elements but was loosely selective for the initiator and flanking sequence. Insertion of a response element or a relatively strong Sp1 cluster to recruit ER upstream of the core promoters caused a switch to activation by E2/ER that was inhibited by Tam. In nuclear extracts, association of ER with a biotinylated core promoter fragment was promoted by E2 but Tam blocked this effect. Repression/de-repression of the P4 promoter and endogenous FR-alpha expression by E2/Tam required SMRT and/or NCoR. ER associated with the chromosomal P4 promoter and SMRT and NCoR associated with it in an ER-dependent manner; these associations were favored by E2 but disrupted by Tam, in the short term, without changes in ER expression. TAFII30 was required for optimal P4 promoter activity and for the repressive association of ER. E2 may thus maintain a low transcriptional status of genes by favoring direct TAFII30-dependent association of ER with the core promoter in a co-repressor complex containing SMRT and/or NCoR; this repression is overridden in target genes containing an upstream element that strongly recruits ER. In addition to suppressing the activation of classical E2 target genes, Tam may upregulate genes by passively dissociating the ER co-repressor complex.