17beta-Estradiol modulates gene transcription through the estrogen receptor and the estrogen response element in DNA. The human transforming growth factor-beta3 gene was shown to be activated by the estrogen receptor in the presence of estrogen metabolites or estrogen antagonists. Activation was mediated by a polypurine sequence, termed the raloxifene response element, and did not require the DNA binding domain of the estrogen receptor. Interaction of the estrogen receptor with the raloxifene response element appears to require a cellular adapter protein. The observation that individual estrogens modulate multiple DNA response elements may explain the tissue-selective estrogen agonist or antagonist activity of compounds such as raloxifene.