The biological effects of estrogen (E) in mammalian target tissues are important for numerous physiological processes. E is known to induce responses in the reproductive tract, mammary tissue and pituitary but also affects nonreproductive processes such as bone formation and cardiovascular health. Since the initial identification and isolation of the estrogen receptor (ER) molecule decades ago, the mechanism of estrogen (E) action in cells has been intensely studied. At the core, our understanding of the basic mechanism has remained the same, however, the details continue to be defined and many new aspects remain to be discovered. The dogma of high affinity E binding and modulation of transcription via high affinity estrogen responsive elements (EREs) in target genes still remains the basis of E action in target tissues. However, this model has become much more complex with the understanding that many other factors cooperate and interact to modulate transcription. In addition there are``twists''in the``plot'', in alternatives to E activation of ER as well as ER's ability to modulate transcription of genes that lack EREs. Advances in technology and methods available for molecular, structural, biochemical, genetic and physiological analysis of ER function have allowed for the definition of many of the details of ER function in in vitro model systems and the expansion of these models into genetically modified mouse models. This chapter will review the current understanding of the mechanism of ER function and then describe insights gained from use of transgenic mouse models.