Molecular dynamics simulations are carried out to investigate the binding of the estrogen receptor, a member of the nuclear hormone receptor family, to specific and non-specific DNA. Two systems have been simulated, each based on the crystallographic structure of a complex of a dimer of the estrogen receptor DNA binding domain with DNA. One structure includes the dimer and a consensus segment of DNA, ds(CCAGGTCACAGTGACCTGG); the other structure includes the dimer and a nonconsensus segment of DNA, ds(CCAGAACACAGTGACCTGG). The simulations involve an atomic model of the protein-DNA complex, counterions, and a sphere of explicit water with a radius of 45 A. The molecular dynamics package NAMD was used to obtain 100 ps of dynamics for each system with complete long-range electrostatic interactions. Analysis of the simulations revealed differences in the protein-DNA interactions for consensus and nonconsensus sequences, a bending and unwinding of the DNA, a slight rearrangement of several amino acid side chains, and inclusion of water molecules at the protein-DNA interface region. Our results indicate that binding specificity and stability is conferred by a network of direct and water mediated protein-DNA hydrogen bonds. For the consensus sequence, the network involves three water molecules, residues Glu-25, Lys-28, Lys-32, Arg-33, and bases of the DNA. The binding differs for the nonconsensus DNA sequence in which case the fluctuating network of hydrogen bonds allows water molecules to enter the protein-DNA interface. We conclude that water plays a role in furnishing DNA binding specificity to nuclear hormone receptors.