LIM/Homeodomain (HD) proteins are classically considered as major transcriptional regulators which, in cooperation with other transcription factors, play critical roles in the developing nervous system. Among LIM/HD proteins, Islet-1 (ISL1) is the earliest known marker of motoneuron differentiation and has been extensively studied in this context. However, ISL1 expression is not restricted to developing motoneurons. In both embryonic and adult central nervous system of rodent and fish, ISL1 is found in discrete brain areas known to express the estrogen receptor (ER). These observations led us to postulate the possible involvement of ISL1 in the control of brain functions by steroid hormones. Dual immunohistochemistry for ISL1 and ER provided evidence for ISL1-ER coexpression by the same neuronal subpopulation within the rat hypothalamic arcuate nucleus. The relationship between ER and ISL1 was further analyzed at the molecular level and we could show that 1) ISL1 directly interacts in vivo and in vitro with the rat ER, as well as with various other nuclear receptors; 2) ISL1-ER interaction is mediated, at least in part, by the ligand binding domain of ER and is significantly strengthened by estradiol; 3) as a consequence, ISL1 prevents ER dimerization in solution, thus leading to a strong and specific inhibition of ER DNA binding activity; 4) ISL1, via its N-terminal LIM domains, specifically inhibits the ER-driven transcriptional activation in some promoter contexts, while ER can serve as a coactivator for ISL1 in other promoter contexts. Taken together, these data suggest that ISL1-ER cross-talk could differentially regulate the expression of ER and ISL1 target genes.