Wild-type p53-induced phosphatase (Wip1) is a serine/threonine phosphatase induced by DNA-damaging agents. This enzyme dephosphorylates several cell cycle regulating proteins, including p53, p38 mitogen-activated protein kinase, Chk1, and Chk2, resulting in negative feedback regulation of p38-p53 signaling after damage repair. Moreover, the Wip1 gene may be amplified or overexpressed, especially in hormone-regulated organs, and Wip1 gene amplification has been correlated with poor prognosis in hormone-related malignancies, including ovarian cancers. We therefore investigated the link between estrogen signaling and Wip1 expression. We identified seven putative estrogen response elements within 3 kb of the Wip1 promoter. We also found that estradiol (E(2)) treatment produced a 3-fold increase in endogenous Wip1 mRNA and protein expression in MCF7 cells. Direct binding of estrogen receptor (ER)alpha to the Wip1 promoter after E(2) treatment was confirmed by a chromatin immunoprecipitation assay using ERalpha antibody and an electrophoretic mobility shift assay. Wip1 overexpression induced by adenovirus and E(2) facilitated the proliferation of serum-starved ZR-75-1 cells, with cell proliferation induced by overexpressed Wip1 approximately 25% higher than that induced by E(2). Wip1 phosphatase activity was essential for cell cycle progression. Wip1 stimulated the transcriptional activity of its own promoter through E(2)-ERalpha signaling. In addition, Wip1 overexpression induced Rb phosphorylation during cancer cell proliferation. These results indicate that Wip1 up-regulation is important in the pathogenesis of p53(+) and ER(+) breast cancer through the inactivation of p53 by dephosphorylation and the amplification of subsequent estrogenic effects through the E(2)-ERalpha-Wip1 pathway.