Calmodulin (CaM) has been reported to have affinity for the estrogen receptor (ER). Observations reported here reveal a direct physical interaction between purified CaM and ER. This direct ER-CaM interaction may be an initial event preceding the assembly of ER plus auxiliary proteins into the active ER complex with its DNA motif, the estrogen response element. We demonstrate that CaM is an integral component of this complex by using a system reconstituted from purified ER and nuclear extract from ER-negative breast cancer cells and also with ER-depleted nuclear extract of an ER-positive breast cancer cell line. Although CaM is essential for formation of this complex, it is not sufficient, suggesting roles also of auxiliary proteins. CaM also is functionally required for activation of an ER-responsive promoter, in the 17beta-estradiol-ER pathway of hormone action and regulation of 17beta-estradiol-responsive gene expression that is associated with proliferation of mammary epithelial cells.