Activation of the heregulin/HER2 pathway in oestrogen receptor (ER)-positive breast-cancer cells leads to suppression of oestrogen-receptor element (ERE)-driven transcription and disruption of oestradiol responsiveness, and thus contributes to progression of tumours to more invasive phenotypes. Here we report the identification of metastatic-associated protein 1 (MTA1), a component of histone deacetylase (HDAC) and nucleosome-remodelling complexes, as a gene product induced by heregulin-beta1 (HRG). Stimulation of cells with HRG is accompanied by suppression of histone acetylation and enhancement of deacetylase activity. MTA1 is also a potent corepressor of ERE transcription, as it blocks the ability of oestradiol to stimulate ER-mediated transcription. The histone-deacetylase inhibitor trichostatin A blocks MTA1-mediated repression of ERE transcription. Furthermore, MTA1 directly interacts with histone deacetylase-1 and -2 and with the activation domain of ER-alpha. Overexpression of MTA1 in breast-cancer cells is accompanied by enhancement of the ability of cells to invade and to grow in an anchorage-independent manner. HRG also promotes interaction of MTA1 with endogenous ER and association of MTA1 or HDAC with ERE-responsive target-gene promoters in vivo. These results identify ER-mediated transcription as a nuclear target of MTA1 and indicate that HDAC complexes associated with the MTA1 corepressor may mediate ER transcriptional repression by HRG.