XAP2 (also known as aryl hydrocarbon receptor interacting protein, AIP) is originally identified as a negative regulator of the hepatitis B virus X-associated protein. Recent studies have expanded the range of XAP2 client proteins to include the nuclear receptor family of transcription factors. In this study, we show that XAP2 is recruited to the promoter of ERα regulated genes like the breast cancer marker gene pS2 or GREB1 and negatively regulate the expression of these genes in MCF-7 cells. Interestingly, we show that XAP2 downregulates the E₂-dependent transcriptional activation in an estrogen receptor (ER) isoform-specific manner: XAP2 inhibits ERα but not ERβ-mediated transcription. Thus, knockdown of intracellular XAP2 levels leads to increased ERα activity. XAP2 proteins, carrying mutations in their primary structures, loose the ability of interacting with ERα and can no longer regulate ER target gene transcription. Taken together, this study shows that XAP2 exerts a negative effect on ERα transcriptional activity and may thus prevent ERα-dependent events.