Breast cancers lacking estrogen receptor (ER) expression have an adverse prognosis and fail to respond to endocrine therapy. We have identified a transcriptional enhancer in the human ER gene which is differentially active in ER-positive (ER+) and ER-negative (ER-) human breast cancer cell lines. Enhancer function was mapped to a 35-bp element located from -3778 to -3744 upstream of the major human ER mRNA start site, which we have termed ER-EH0 (for estrogen receptor enhancer). Gel retardation assays with ER+ and ER- cell lines identified multiple DNA-protein complexes which specifically form on this enhancer. One of these complexes could be supershifted by anti-Jun or anti-Fos antibodies, identifying it as an AP-1-containing complex. Methylation interference assays suggest binding of factors to both the AP-1 site and adjacent base pairs. Enhancer activity requires both the AP-1 site and these adjacent sequences. Mutations introduced into ER-EH0 and the recently described proximal promoter element ERF-1 in the context of the full-length promoter confirm ER-EH0 as the dominant cis-acting element involved in differential ER expression.