The effects of estrogen and estrogen agonists can be mediated by estrogen receptor alpha (ER alpha) and estrogen receptor beta (ER beta). We now report the identification and initial characterization of several novel isoforms of rat ER beta messenger RNA (mRNA). The most abundant of these mRNA variants we have called ER beta2. ER beta2 had an in-frame insertion of 54 nucleotides that resulted in the predicted insertion of 18 amino acids within the ligand binding domain. We demonstrated by semiquantitative RT-PCR and RNase protection that ER beta2 mRNA was expressed at levels equal to those of the previously published ER beta (ER beta1) in ovary, prostate, pituitary, and muscle. In tissues of the nervous system, including frontal cortex, hippocampus, and hypothalamus, ER beta1 was present in a 2- to 6-fold greater abundance than ER beta2. We have also detected variants of both ER beta1 and ER beta2 mRNAs that contained deletions of 117 bp encompassing the region encoding the second zinc finger of the DNA binding domain. All four mRNA species were efficiently translated into functional protein in a heterologous system. ER beta2 bound estradiol with a lower affinity (Kd 5.1 nM) than either ER alpha (0.19 nM) or ER beta1 (0.14 nM). The binding of ER beta2 was selective in that cortisol, testosterone, aldosterone, and progesterone among other agents did not compete for estradiol binding. However, a variety of known estrogenic agents, including physiological estrogens (estrone and estriol), plant and environmental estrogens (genistein, coumestrol, bisphenol A, methoxychlor), and pharmocological agents (tamoxifen, 4-hydroxytamoxifen) did effectively compete for estradiol binding to both ER beta1 and ER beta2. Interestingly, the binding pharmacology differed among the agents tested. For example, genistein competed effectively for estradiol binding to ER beta1 but was > 150-fold weaker at competing from ER beta2. In contrast, 4-hydroxytamoxifen competed equally well at both receptors. We have also demonstrated by a gel shift assay that both ER beta1 and ER beta2 bound specifically to DNA containing a consensus estrogen response element. ER beta1 and ER beta2 could heterodimerize with each other and with ER alpha. Both ER beta1 and ER beta2 activated transcription in response to estradiol, however, ER beta2 required a 1000-fold greater estradiol concentration for activity than did ER beta1. Cotransfection of ER beta2 had no effect on ER beta1 activation when used in a equal ratio. A 10-fold excess of ER beta2 did raise the half-maximal dose of estradiol required for transcriptional activation, whereas the maximal level of induction did not change. The ER beta complementary DNAs deleted within the DNA binding domain could not bind to DNA or activate transcription from this reporter in the cell backgrounds tested. In conclusion, although the physiological significance of these ER beta variants warrants further investigation, ER beta2 mRNA encodes a specific, functional receptor for estradiol and estrogenic agents. We propose that ER beta2 should also be considered in addition to ER beta1 and ER alpha when describing the effects of estrogen, estrogen agonists/antagonists, or environmental estrogens.