Truncated estrogen receptor product-1 (TERP-1) is a naturally occurring rat estrogen receptor (ER) variant transcribed from a unique start site and containing a unique 5'-untranslated region fused to exons 5-8 of ERalpha. TERP-1 is detected only in the pituitary, and TERP-1 mRNA levels are highly regulated during the estrous cycle, exceeding those of the full-length ERalpha on proestrus. These data suggest that TERP-1 may play a role in estrogen- regulated feedback in the pituitary. We examined the ability of TERP-1 to modulate gene transcription in transiently transfected ER-negative (Cos-1) and ER-positive pituitary (alphaT3 and GH3) cell lines. In Cos-1 cells transiently cotransfected with TERP-1 and either ERalpha or ERbeta, low levels of TERP-1 (ratios of < 1:1 with ER) enhanced transcription of model promoters containing estrogen response elements by an average of 3- to 4-fold above that seen with ER alone. At higher concentrations of TERP-1 (> 1:1 with ER) transcription was inhibited. TERP-1 also had a biphasic action on transcription in the alphaT3 and GH3 pituitary cell lines, although the stimulatory action was less pronounced. TERP-1 actions were dependent on ligand-activated ER as TERP-1 did not bind estradiol in transfected Cos-1 cells or in vitro, and estrogen antagonists prevented the stimulatory effects of TERP-1. Coimmunoprecipitation studies suggest that TERP-1 does not bind with high affinity to the full-length ERalpha. However, TERP-1 may compete with ER for binding sites of receptor cofactors because steroid receptor coactivator-1 (SRC-1) rescued the inhibitory actions of TERP-1. The ability of TERP-1 to both enhance and inhibit ER-dependent promoter activity suggests that TERP-1 may play a physiological role in estrogen feedback in the rat pituitary.