We describe an assay employing the competitive binding of estrogen receptor (ER) with basal transcription factors on a constitutive promoter (cytomegalovirus-hormone response element[s]-chloramphenicol acetyltransferase [CMV-(HRE)n-CAT, containing a hormone response element(s) between the TATA box and the start site of transcription]) to examine the DNA-binding ability of the human ER in whole cells. We used this promoter interference assay to examine the DNA binding of ER in cell lines containing high and low levels of endogenous ER, as well as in CHO cells expressing wild-type and mutant ERs from cotransfected expression vectors. The ER is capable of binding to the promoter interference constructs in the absence of added ligand, and estrogen (estradiol) or antiestrogen (trans-hydroxytamoxifen or ICI 164,384) enhances or stabilizes this interaction. The binding of unoccupied ER to reporter gene activation plasmids results in ligand-independent transactivation, presumably due to the TAF-1 function of the receptor. DNA binding of ER in the absence of ligand is observed in cells containing endogenous ER, or expressed ER, and occurs in cells with high or low receptor contents. Although estrogen- and antiestrogen-occupied ER complexes bind to DNA and reduce the template promoter activity, the extent of suppression achieved by ICI-bound ERs is consistently less than that achieved with the other ligands, presumably caused by the fact that ICI rapidly reduces the level of ER in most of the cells examined. However, the ICI-ER complexes that remain are in sufficient quantity to bind to gene activation reporter constructs, and in these cells, ICI still behaves as a pure antagonist of gene transcription and does not activate reporter genes. Hence, obstruction of ER DNA binding or reduction of ER in target cells may contribute to, but cannot fully explain, the pure antagonist character of the antiestrogen ICI 164,384. In addition, DNA binding by the ER alone is clearly not sufficient for ensuring full activation of transcription and argues for an intermediate in the receptor activation of promoters.