Estrogen, a naturally occurring female steroid growth hormone, has been implicated as a major risk factor for the development of breast cancer. Recent research into this disease has also correlated Annexin-1 (ANXA1), a glucocorticoid-inducible protein, with the development of breast tumorigenesis. ANXA1 is lost in many cancers, including breast cancer, and this may result in a functional promotion of tumor growth. In this study, we investigated the expression of ANXA1 in MCF-7 cells treated with estrogen and the regulation of estrogen functions by ANXA1. Exposure of MCF-7 breast cancer cells to high physiologic levels (up to 100 nmol/L) of estrogen leads to an up-regulation of ANXA1 expression partially through the activation of cyclic AMP-responsive element binding protein and dependency on activation of the estrogen receptor. In addition, treatment of MCF-7 cells with physiologic levels of estrogen (1 nmol/L) induced proliferation, whereas high pregnancy levels of estrogen (100 nmol/L) induced a growth arrest of MCF-7 cells, associated with constitutive activation of extracellular signal-regulated kinase 1/2 and up-regulation of cell cycle arrest proteins such as p21(waf/cip). Silencing of ANXA1 with specific small interfering RNA reverses the estrogen-dependent proliferation as well as growth arrest and concomitantly modulates extracellular signal-regulated kinase 1/2 phosphorylation. We confirm that ANXA1 is lost in clinical breast cancer, indicating that the antiproliferative protective function of ANXA1 against high levels of estrogen may be lost. Finally, we show that ANXA1-deficient mice exhibit faster carcinogen-induced tumor growth. Our data suggest that ANXA1 may act as a tumor suppressor gene and modulate the proliferative functions of estrogens.