We reported previously that the loss of expression of estrogen receptor (ER)-beta during the development of prostate cancer (PCa) is associated with methylation of a CpG island located in the 5'-flanking sequence of the 0N promoter. Three methylation hotspots, referred to as centers 1, 2 and 3, were identified in the CpG island. In this study, we demonstrated that a 581-bp region with these three centers within it is sufficient for the promoter activity in PCa cells. Deletion analyses indicated that center 1 (16 bp), with a putative activator protein-2 (AP-2) binding site, is essential for gene transactivation. Chromatin immunoprecipitation assays showed that AP-2alpha occupies a short sequence containing center 1. Forced expression of AP-2alpha or -2gamma, but not -2beta, increased activity of the ERbeta 0N promoter and the accumulation of mRNA. Conversely, siRNA-mediated AP-2alpha and -2gamma knockdown reduced levels of ERbeta transcript and promoter activity. Quantitative reverse transcription-PCR showed that AP-2alpha and -2gamma are the predominant transcripts expressed in PCa cells, and levels of ERbeta transcript correlate with levels of these AP-2 transcripts among different PCa cell lines. These results provide the first evidence that ERbeta is an AP-2-regulated gene. They also support the hypothesis that certain cis-acting elements are methylation hotspots susceptible to epigenetic modifications during cancer progression.