SHP (short heterodimer partner) is an unusual orphan receptor that lacks a conventional DNA-binding domain. Previous results have shown that it interacts with several other nuclear hormone receptors, including the retinoid and thyroid hormone receptors, and inhibits their ligand-dependent transcriptional activation. Here we show that SHP also interacts with estrogen receptors and inhibits their function. In mammalian and yeast two-hybrid systems as well as glutathione-S-transferase pull-down assays, SHP interacts specifically with estrogen receptor-alpha (ERalpha) in an agonist-dependent manner. The same assay systems using various deletion mutants of SHP map the interaction domain with ERalpha to the same SHP sequences required for interaction with the nonsteroid hormone receptors such as retinoid X receptor and thyroid hormone receptor. In transient cotransfection assays, SHP inhibits estradiol -dependent activation by ERalpha by about 5-fold. In contrast, SHP interacts with ERbeta independent of ligand and reduces its ability to activate transcription by only 50%. These data suggest that SHP functions to regulate estrogen signaling through a direct interaction with ERalpha.