3,3'-Diindolylmethane (DIM) is a natural compound found in cruciferous vegetables that has antiproliferative and estrogenic activity. However, it is not clear whether the estrogenic effects are mediated through estrogen receptor (ER)alpha, ERbeta, or both ER subtypes. We investigated whether DIM has ER subtype selectivity on gene transcription. DIM stimulated ERbeta but not ERalpha activation of an estrogen response element upstream of the luciferase reporter gene. DIM also selectively activated multiple endogenous genes through ERbeta. DIM did not bind to ERbeta, indicating that it activates genes by a ligand-independent mechanism. DIM causes ERbeta to bind regulatory elements and recruit the steroid receptor coactivator (SRC)-2 coactivator, which leads to the activation of ER target genes. Silencing of SRC-2 inhibited the activation of ER target genes, demonstrating that SRC-2 is required for transcriptional activation by DIM. Our results demonstrate that DIM is a new class of ERbeta-selective compounds, because it does not bind to ERbeta, but instead it selectively recruits ERbeta and coactivators to target genes.