Essential for embryonic development, the polycomb group protein enhancer of zeste homolog 2 (EZH2) is overexpressed in breast and prostate cancers and is implicated in the growth and aggression of the tumors. The tumorigenic mechanism underlying EZH2 overexpression is largely unknown. It is believed that EZH2 exerts its biological activity as a transcription repressor. However, we report here that EZH2 functions in gene transcriptional activation in breast cancer cells. We show that EZH2 transactivates genes that are commonly targeted by estrogen and Wnt signaling pathways. We demonstrated that EZH2 physically interacts directly with estrogen receptor ␣ and -catenin, thus connecting the estrogen and Wnt signaling circuitries, functionally enhances gene transactivation by estrogen and Wnt pathways, and phenotypically promotes cell cycle progression. In addition, we identified the transactivation activity of EZH2 in its two N-terminal domains and demonstrated that these structures serve as platforms to connect transcription factors and the Mediator complex. Our experiments indicated that EZH2 is a dual function transcription regulator with a dynamic activity, and we provide a mechanism for EZH2 in tumorigenesis.Initially discovered as epigenetic silencers during embryogenesis, polycomb group (PcG) proteins have been implicated in development and differentiation (34). The biological activities of PcG proteins are expanding and now include the regulation of various adult processes, such as lymphopoiesis, Xinactivation, and cell proliferation, and several PcG genes have been implicated in tumorigenesis (3,5).Initial suggestions that EZH2 is involved in cell proliferation came from the observation that EZH2 is preferentially expressed in proliferating, but not resting, mantle cell lymphoma cells (53). Subsequently, EZH2 was found to be overexpressed in metastatic prostate cancer, and knockdown of EZH2 expression inhibited cell proliferation (52). It was also observed that the EZH2 level directly correlates with the aggressiveness of breast cancer, and forced EZH2 expression in immortalized human mammary epithelial cell lines promotes anchorageindependent growth and cell invasion (3,20).How EZH2 promotes cell proliferation and tumor progression is still largely unknown. It is believed that EZH2 functions by forming polycomb repressive complex (PRC) with other PcG proteins (29, 35). These protein complexes are characterized by an intrinsic histone lysine methyltransferase (HMTase) activity that is mediated by the SET domain of EZH2 (25) and that targets different lysine residues on histones H1 or H3 in vitro (5, 23). Core histone methylation facilitates the establishment of a stable, repressive chromatin structure to prevent transcription initiation by prebound factors (7). In addition, several PcG proteins interact or colocalize with various nonPcG proteins, including the transcription modulators CtBP (41), E2F6 (2, 51), RYBP (12), AF9 (13), SSX (49), and the mitogen-activated protein/kinase-activated protein kinase 3...