We have characterized a human estrogen receptor (ER) mutant, V364E, which has a single amino acid substitution in its hormone-binding domain. This ER mutant is fully active or even superactive at saturating levels of estradiol (10(-8) M E2) yet has the capacity to act as a strong dominant negative inhibitor of the wild type ER. In transient transfection assays using ER-negative Chinese hamster ovary (CHO) cells and two different estrogen response element (ERE)-containing promoter reporter genes, V364E treated with 10(-8) M E2 exhibited approximately 250% and 100% of the activity of the wild type ER with these two promoter contexts, respectively. Despite the high activity of V364E when present alone in cells, coexpression of both V364E and wild type ER causes a significant decrease in overall ER-mediated transcriptional activity. On the TATA promoter, where V364E was more inhibitory, estrogen-stimulated activity was reduced by approximately 50% at a 1:1 ratio of mutant to wild type ER expression vector, and at a 10:1 ratio, 75% of ER activity was inhibited. V364E was expressed at lower levels than wild type ER and has a approximately 40-fold lower affinity for E2 compared with wild type ER. In promoter interference assays, V364E exhibited a strict dependence upon E2 for binding to an ERE. Surprisingly, even when V364E was unable to bind to ERE DNA (i.e. either at low E2 concentration or by mutation of its DNA-binding domain), this mutant retained full dominant negative activity. This highly active ER mutant is, thus, able to repress ER-mediated transcription when the mutant and wild type ER are present together in cells, even without DNA binding. Since competition for ERE binding and the formation of inactive heterodimers cannot fully account for the dominant negative activity of V364E, it is probable that altered interactions with proteins important in ER-mediated transcription play a key role in the repression of transcription by V364E. The properties and probable mechanism of action of V364E distinguish it from other previously described dominant negative inhibitors, in which competition for cis-acting DNA elements by transcriptionally inactive receptors played a large role in the resultant dominant negative phenotype.