The glucocorticoid receptor accumulates in nuclei only in the presence of bound hormone, whereas the estrogen receptor has been reported to be constitutively nuclear. To investigate this distinction, we compared the nuclear localization domains of the two receptors and the capacity of their respective hormone-binding regions to regulate nuclear localization activity. As with the glucocorticoid receptor, we showed that the human estrogen receptor contained a nuclear localization signal between the DNA-binding and hormone-binding regions (amino acids 256-303); however, in contrast to the glucocorticoid receptor, the estrogen receptor lacked a second nuclear localization domain within the hormone-binding region. Moreover, the hormone-binding domain of the unliganded estrogen receptor failed to regulate nuclear localization signals, although it efficiently regulated other receptor functions. We conclude that the two receptors employ a common mechanism for signal transduction involving a novel "inactivation" function, but that they differ in their control of nuclear localization. Thus, despite the strong relatedness of the estrogen and glucocorticoid receptors in structure and activity, certain differences in their properties could have important functional implications.