Estrogen receptor beta (ERbeta) is the predominant ER in the colorectal epithelium. Compared with normal colon tissue, ERbeta expression is reduced in colorectal cancer. Our hypothesis is that ERbeta inhibits proliferation of colon cancer cells. Hence, the aim of this study has been to investigate the molecular function of ERbeta in colon cancer cells, focusing on cell cycle regulation. SW480 colon cancer cells have been lentivirus transduced with ERbeta expression construct with or without mutated DNA-binding domain or an empty control vector. Expression of ERbeta resulted in inhibition of proliferation and G(1) phase cell cycle arrest and this effect was dependent on a functional DNA-binding region. c-Myc is overexpressed in an overwhelming majority of colorectal tumors. By Western blot and real-time PCR, we found c-Myc to be down-regulated in the ERbeta-expressing cells. Furthermore, the c-Myc target gene p21((Waf1/Cip1)) was induced and Cdc25A was reduced by ERbeta at the transcriptional level. The second cdk2-inhibitor, p27(Kip1), was induced by ERbeta, but this regulation occurred at the posttranscriptional level, probably through ERbeta-mediated repression of the F-box protein p45(Skp2). Expression of the ERbeta-variant with mutated DNA binding domain resulted in completely different cell cycle gene regulation. We performed in vivo studies with SW480 cells +/- ERbeta transplanted into severe combined immunodeficient/beige mice; after three weeks of ERbeta-expression, a 70% reduction of tumor volume was seen. Our results show that ERbeta inhibits proliferation as well as colon cancer xenograft growth, probably as a consequence of ERbeta-mediated inhibition of cell-cycle pathways. Furthermore, this ERbeta-mediated cell cycle repression is dependent on functional ERE binding.