New World primates exhibit a form of resistance to estrogens that is associated with overexpression of an estrogen response element (ERE)-binding protein (ERE-BP) and an intracellular estradiol (E(2))-binding protein (IEBP). Both proteins suppress E(2)-mediated transcription when overexpressed in estrogen receptor-alpha (ERalpha)-positive cells. Although ERE-BP acts as a competitor for ERE occupancy by liganded ERalpha, the function of IEBP and its human homolog, heat-shock protein 27 (hsp27), is less clear. In data presented here, we have used E(2)-responsive human MCF-7 breast cancer cells to show that IEBP/hsp27 can regulate estrogen signaling as a cytosolic decoy for E(2) and as a protein chaperone for ERalpha. Furthermore, co-immunoprecipitation, colocalization, yeast two-hybrid, and glutathione S-transferase pull-down analyses indicate that IEBP/hsp27 also interacts with ERE-BP to form a dynamic complex that appears to cycle between the cytoplasm and nucleus during normal estrogen signaling. Overexpression of either IEBP/hsp27 or ERE-BP in MCF-7 cells resulted in abnormal subcellular distribution of the IEBP/hsp27 and ERE-BP, with concomitant dysregulation of ERE occupancy as determined by chromatin immunoprecipitation. We hypothesize that IEBP/hsp27 and ERE-BP not only cause hormone resistance in New World primates but are also crucial to normal estrogen signaling in human cells. This appears to involve a physical association between the two proteins to form a complex that is able to interact with both E(2) and ERalpha in cytosolic and nuclear compartments.