The estrogen receptor alpha (ERalpha) is activated as a transcription factor by both estrogen and a large variety of other extracellular signals. The mechanisms of this ligand-independent activation, notably by cAMP signaling, are still largely unknown. We now close the gap in the signaling pathway between cAMP and ERalpha. Whereas the direct phosphorylation of ERalpha by the cAMP-activated protein kinase A (PKA) is dispensable, the phosphorylation of the coactivator-associated arginine methyltransferase 1 (CARM1) by PKA at a single serine is necessary and sufficient for direct binding to the unliganded hormone-binding domain (HBD) of ERalpha, and the interaction is necessary for cAMP activation of ERalpha. Sustained PKA activity promoting a constitutive interaction may contribute to tamoxifen resistance of breast tumors. Binding and activation involve a novel regulatory groove of the ERalpha HBD. As a result, depending on the activating signal, ERalpha recruits different coactivator complexes to regulate alternate sets of target genes.