Estrogens exert their physiological effects through two estrogen receptor (ER) subtypes, ERalpha and ERbeta. In mouse, the cloning of an alternative splice variant of the wild-type ERbeta (mERbeta1), mERbeta2, which contains an 18 amino acid insertion in the ligand binding domain, contributed an additional level of complexity to estrogen signaling. In this study we have assayed the interaction of several known ligands with mERbeta1 and mERbeta2. The binding affinity of estradiol was 14-fold higher for mERbeta1 than for mERbeta2. In contrast, raloxifene was dramatically (8-fold) mERbeta2 selective. The selectivity for mERbeta2 was abolished when the 2-arylbenzothiophene core of the raloxifene molecule was tested for binding affinity, demonstrating that the 3-aroyl side chain of raloxifene plays an important role in contributing to its mERbeta2 selectivity. The opposite isoform selectivity found for estradiol and raloxifene in our ligand binding assay was also reflected in the transactivation assay system. That is, mERbeta2 required 10-fold greater estradiol concentrations for maximal activation compared to mERbeta1, whereas raloxifene was more potent in antagonizing estradiol-induced gene expression via mERbeta2 than mERbeta1. The raloxifene core behaved as a pure agonist. Furthermore, mERbeta2 showed significantly decreased estradiol-induced maximal transcriptional activity as compared to mERbeta1. A pull-down assay indicated that the interactions of TIF2 and RAP250 with mERbeta2 were weaker than with mERbeta1. To assess TIF2 and RAP250 interactions with ERs more quantitatively, we examined the interaction of LXXLL containing peptides derived from TIF2 and RAP250 with mERbeta1 and mERbeta2 using surface plasmon resonance analysis. Our results indicate that mERbeta2 interacts with both coactivators with lower affinity, which may explain its reduced transcriptional activity. Taken together, these results suggest that ligand selectivity and coactivator recruitment of the ERbeta isoforms constitute additional levels of specificity that influence the transcriptional response in estrogen target cells.