Essential for embryonic development, the polycomb group protein enhancer of zeste homolog 2 (EZH2) is overexpressed in breast and prostate cancers and is implicated in the growth and aggression of the tumors. The tumorigenic mechanism underlying EZH2 overexpression is largely unknown. It is believed that EZH2 exerts its biological activity as a transcription repressor. However, we report here that EZH2 functions in gene transcriptional activation in breast cancer cells. We show that EZH2 transactivates genes that are commonly targeted by estrogen and Wnt signaling pathways. We demonstrated that EZH2 physically interacts directly with estrogen receptor alpha and beta-catenin, thus connecting the estrogen and Wnt signaling circuitries, functionally enhances gene transactivation by estrogen and Wnt pathways, and phenotypically promotes cell cycle progression. In addition, we identified the transactivation activity of EZH2 in its two N-terminal domains and demonstrated that these structures serve as platforms to connect transcription factors and the Mediator complex. Our experiments indicated that EZH2 is a dual function transcription regulator with a dynamic activity, and we provide a mechanism for EZH2 in tumorigenesis.