Activation of estrogen receptors (ERs) by estrogens triggers both ER nuclear transcriptional activity and Src/Ras/Erks pathway-dependent mitogenic activity. The present study implicates prenylated proteins in both estrogenic actions. The farnesyltransferase and geranylgeranyltransferase I inhibitors (FTI-277 and GGTI-298, respectively) antagonize estradiol-stimulated cell cycle progression, progesterone receptor, cyclin D1, and c-Myc expression. In contrast, the inhibitors markedly stimulate transcription from two genes containing estrogen response elements, both in the absence and presence of estradiol. The pure antiestrogen ICI 182,780 inhibits by more than 85% these effects on transcription. We demonstrate that both FTI-277 and GGTI-298 increase the association of steroid receptor coactivator-1 with ER alpha and FTI-277 decreases the association of ER alpha with the histone deacetylase 1, a known transcriptional repressor. In addition, FTI-277 has no marked effect on the association of the two corepressors, nuclear receptor corepressor and silencing mediator of retinoid and thyroid receptor with ER alpha, whereas GGTI-298, similar to tamoxifen, clearly increased these associations. Together, these results demonstrate that prenylated proteins play a role in estradiol stimulation of proliferation and progesterone receptor expression. However, they antagonize the ability of ER alpha to stimulate estrogen response element-dependent transcriptional activity, acting presumably through coregulator complex formation.