While estrogen's role in maintaining bone health relates to its action on osteoclasts, not much is presently known about the role of estrogen with respect to osteoblasts. Our laboratory is involved in studying the function of the p53 tumor suppressor gene in osteoblast differentiation. This study was therefore designed to understand the role of estrogen in osteoblast growth and differentiation and its effect on p53 function. ROS 17/2.8 cells, stably transfected with a construct containing multiple copies of a p53 response element fused to a chloramphenicol acetyl transferase (CAT) gene, were used to monitor wild-type p53 activity. Maximal p53 activity was observed when E2 was given at concentrations between 10(-12) and 10(-15) M. This increase in p53 activity was due to a change in transcription and peaked at about 16 hours after treatment. An increase in p53 activity was followed by an increase in expression of p53-regulated genes p21 and mdm2. This increase in p53 activity was partially inhibited by inclusion of estrogen antagonist ICI 182,780. Bone- specific markers osteocalcin and alkaline phophatase increased after treatment with E2, as did changes in estrogen receptors alpha and beta. Upregulation of osteocalcin was reduced when cycloheximide was added to E2, suggesting the presence of intermediates in the enhancement of osteocalcin gene transcription. These findings suggest that E2 can directly mediate an increase in p53 expression and function. The relevance of this to osteoblast differentiation is discussed.