Estrogen receptor (ER) beta is the predominant ER in granulosa cells of the ovary. ERbeta is expressed at high levels in granulosa cell tumors (GCT) and in the human GCT-derived cell lines, COV434 and KGN. To gain insight into ERbeta function in granulosa cells and in GCT, we have used the COV434 and KGN cell lines. Although the cells bind estradiol (E2), transcriptional activation of a transfected estrogen-responsive reporter vector construct (ERE2-luc) by E2 was not observed. Transactivation was also not observed with cotransfected ERalpha or beta. This transcriptional resistance is specific to steroid receptor transactivation; reporter plasmids that are activated by the transcription factors activator protein 1 (AP-1) and nuclear factor kappaB (NF-kappaB) demonstrate both constitutive and inducible transactivation. AP-1 and NF-kappaB are known to cause transrepression of both ERalpha- and glucocorticoid receptor-mediated transcription. We therefore examined the possibility that activation of these pathways was responsible for the lack of a response to estrogen by using inhibitors of AP-1 or NF-kappaB. The AP-1 inhibitors alone had no effect, whereas inhibition of NF-kappaB signaling allowed a 3- to 4-fold E2-mediated induction of ERE2-luc. This response was both ligand and ER dependent. Repression of ERbeta signaling by NF-kappaB has not previously been reported. Recent evidence suggests that ERbeta may function to promote differentiation. The inhibition of ERbeta in combination with the antiapoptotic properties of NF-kappaB may therefore contribute to pathogenesis of GCT.