NO, produced by endothelial NO synthase (eNOS), is a key mediator of pulmonary vasodilation during cardiopulmonary transition at birth. The capacity for NO production is maximal at term because pulmonary eNOS expression increases during late gestation. Since fetal estrogen levels rise markedly during late gestation and there is indirect evidence that the hormone enhances nonpulmonary NO production in adults, estrogen may upregulate eNOS in fetal pulmonary artery endothelium. Therefore, we studied the direct effects of estrogen on eNOS expression in ovine fetal pulmonary artery endothelial cells (PAECs). Estradiol-17β caused a 2.5-fold increase in NOS enzymatic activity in PAEC lysates. This effect was evident after 48 hours, and it occurred in response to physiological concentrations of the hormone (10⁻¹⁰ to 10⁻⁶ mol/L). The increase in NOS activity was related to an upregulation in eNOS protein expression, and eNOS mRNA abundance was also enhanced. Estrogen receptor antagonism with ICI 182,780 completely inhibited estrogen-mediated eNOS upregulation, indicating that estrogen receptor activation is necessary for this response. In addition, immunocytochemistry revealed that fetal PAECs express estrogen receptor protein. Furthermore, transient transfection assays with a specific estrogen-responsive reporter system have demonstrated that the endothelial estrogen receptor is capable of estrogen-induced transcriptional transactivation. Thus, estrogen upregulates eNOS gene expression in fetal PAECs through the activation of PAEC estrogen receptors. This mechanism may be responsible for pulmonary eNOS upregulation during late gestation, thereby optimizing the capacity for NO-mediated pulmonary vasodilation at birth.