The initial step in the regulation of the transcriptional activity of the estrogen receptor (ER) is the binding of hormone. Previous studies have suggested that the region between amino acids 515 and 535 near the C terminus of the human ER is likely to be important in ligand binding. In order to explicitly define which amino acids in this region are critical for ligand recognition and binding, we have utilized alanine-scanning mutagenesis over the complete 515-535 region. The ability of these 21 mutants to activate transcription in response to the natural estrogen, 17beta-estradiol (E2), was evaluated in cell co-transfection assays with estrogen-responsive reporter genes. In addition, their ability to bind E2 was also tested. Mutations at four sites in the 521-528 region had the greatest effects on E2-induced transcription, with L525A reducing responsiveness 250-fold, G521A and H524A 35-fold, and M528A 11-fold. Mutations at other sites had either no effect or a 4-fold or lesser reduction in sensitivity to E2 (M517A, Y526A, N532A, and P535A). Three of the mutants most affected in their transcriptional response, G521A, H524A, and M528A, showed a coordinate reduction in E2 binding affinity. E2 binding by the most affected mutant, L525A, could not be detected. Thus, the altered transcriptional response of these ER mutants appears to derive solely from an alteration in their affinity for the ligand E2. The four sites most affected by alanine substitution, 521, 524, 525, and 528, follow an alpha-helical periodicity, such that they would be positioned on one face of an alpha-helix. Furthermore, they correspond precisely to residues in an alpha-helix shown to be in contact with ligand in the recently described x-ray crystal structures of two other members of the nuclear hormone receptor superfamily, namely the retinoic acid receptor- and thyroid hormone receptor-ligand complexes. Our findings, which broaden observations to the steroid receptor family within the superfamily of nuclear receptors, suggest that this region of the estrogen receptor is in contact with its cognate ligand in a similar fashion.