The pathogenesis and the mechanism of orally administered propranolol in the treatment of hemangioma are unclear. In this study, we evaluated the changes of xenograft hemangioma in nude mice after intervention with estradiol and propranolol. Raf-1 and p-ERK expression in xenograft hemangiomas was assessed to evaluate their role in hemangioma proliferation and regression after treatment. A hemangioma xenograft model in nude mice was established. The successful xenograft specimens were selected and then randomized into control group, estradiol group and propranolol group. At the date of injection, and on day 7 and 21 after injection, the morphological changes of xenograft hemangiomas were visually characterized and imaged by light microscopy. The distribution and expression Raf-1 and p-ERK protein was determined by immunohistochemical detection. In control group, the xenografts increased gradually in volume, had a soft texture and their colors gradually turned red with observation of proliferation of endothelial cells and a capillary lumen that contained monolayer endothelial cells. In Estradiol group, the xenografts grew fast and increased significantly in volume, had a soft texture and their colors were dark red with a hyperplasia of endothelial cells, irregular volume, and deranged and compact endothelial cells. More capillary lumens and sinuses were also seen. Raf-1 and p-ERK expression in estradiol group was significantly increased (P < 0.05). In Propranolol group, the xenografts volume decreased, had a soft texture, and their colors turned gradually white with decreased number of proliferative endothelial cells. The vascular lumens, composed of endothelial cells, were larger, and some of them disappeared and were replaced by fibrous connective tissue and vascular adipose tissue. Raf-1 and p-ERK expression in propranolol group was lower than estradiol and control group (P < 0.05). In conclusion, Raf-1/ERK signaling pathway may be involved in hemangioma. Estrogen and propranolol may regulate the proliferation or regression of hemangioma through Raf-1/ERK signaling pathway.