Major histocompatibility complex (MHC) class II proteins are important for the initiation of immune responses and are essential for specific recognition of foreign antigens by the immune system. Regulation of class II MHC expression primarily occurs at the transcriptional level. The class II transactivator protein is the master regulator that is essential for both constitutive and interferon-γ-inducible class II MHC expression. Estrogen [17β-estradiol (17β-E₂)] has been shown to have immunomodulatory effects. In this study, we show that 17β-E₂ down-regulates interferon-γ inducible class II MHC protein levels on brain endothelial cells, as well as other cell types (astrocytes, fibrosacroma cells, macrophages). The inhibitory effects of 17β-E₂ on class II MHC expression are not due to changes in class II transactivator mRNA or protein levels, rather, 17β-E₂ mediates inhibition at the level of class II MHC gene expression. We demonstrate that 17β-E₂ attenuates H3 and H4 histone acetylation and cAMP response element binding protein-binding protein association with the class II MHC promoter, suggesting that 17β-E₂ inhibits class II MHC expression by a novel mechanism involving modification of the histone acetylation status of the class II MHC promoter.