We previously identified a coregulator, repressor of estrogen receptor activity (REA), that directly interacts with estrogen receptor (ER) and represses ER transcriptional activity. Decreasing the intracellular level of REA by using small interfering RNA knockdown or antisense RNA approaches in cells in culture resulted in a significant increase in the level of up-regulation of estrogen-stimulated genes. To elucidate the functional activities of REA in vivo, we have used targeted disruption to delete the REA gene in mice. The targeting vector eliminated, by homologous recombination, the REA exon sequences encoding amino acids 12 to 201, which are required for REA repressive activity and for interaction with ER. The viability of heterozygous animals was similar to that of the wild type, whereas homozygous animals did not develop, suggesting a crucial role for REA in early development. Female, but not male, heterozygous animals had an increased body weight relative to age-matched wild-type animals beginning after puberty. REA mRNA and protein levels in uteri of heterozygous animals were half that of the wild type, and studies with heterozygous animals revealed a greater uterine weight gain and epithelial hyperproliferation in response to estradiol (E2) and a substantially greater stimulation by E2 of a number of estrogen up-regulated genes in the uterus. Even more dramatic in REA heterozygous animals was the loss of down regulation by E2 of genes in the uterus that are normally repressed by estrogen in wild-type animals. Mouse embryo fibroblasts derived from heterozygous embryos also displayed a greater transcriptional response to E2. These studies demonstrate that REA is a significant modulator of estrogen responsiveness in vivo: it normally restrains estrogen actions, moderating ER stimulation and enhancing ER repression of E2-regulated genes.