Alterations in histones, chromatin-related proteins, and DNA methylation contribute to transcriptional silencing in cancer, but the sequence of these molecular events is not well understood. Here we demonstrate that on disruption of estrogen receptor (ER) alpha signaling by small interfering RNA, polycomb repressors and histone deacetylases are recruited to initiate stable repression of the progesterone receptor (PR) gene, a known ERalpha target, in breast cancer cells. The event is accompanied by acquired DNA methylation of the PR promoter, leaving a stable mark that can be inherited by cancer cell progeny. Reestablishing ERalpha signaling alone was not sufficient to reactivate the PR gene; reactivation of the PR gene also requires DNA demethylation. Methylation microarray analysis further showed that progressive DNA methylation occurs in multiple ERalpha targets in breast cancer genomes. The results imply, for the first time, the significance of epigenetic regulation on ERalpha target genes, providing new direction for research in this classical signaling pathway.