Estrogen signaling occurs through at least two distinct molecular pathways: ( i ) direct binding of liganded estrogen receptors (ERs) to estrogen-responsive DNA elements (EREs) (the “ER/ERE pathway”) and ( ii ) indirect recruitment of liganded ERs to activating protein-1 (AP-1)-responsive DNA elements via heterodimers of Fos and Jun (the “ER/AP-1 pathway”). We have developed a biochemical assay for examining ligand-regulated transcription by ERs in the ER/AP-1 pathway. This assay recapitulates the altered (i.e., agonistic) pharmacology of selective estrogen receptor modulator drugs in this pathway reported previously by using various cell-based assays. We used our biochemical assay to examine the detailed mechanisms of ER/AP-1-dependent transcription. Our studies indicate that ( i ) ERα/AP-1 complexes play a critical role in promoting the formation of stable RNA polymerase II preinitiation complexes leading to transcription initiation, ( ii ) chromatin is a key determinant of estrogen and selective estrogen receptor modulator signaling in the ERα/AP-1 pathway, ( iii ) distinct domains of ERα are required for recruitment to DNA-bound Fos/Jun heterodimers and transcriptional activation at AP-1 sites, and ( iv ) different enhancer/activator combinations in the ERα and AP-1 pathways use coactivators in distinct ways. These studies have increased our understanding of the molecular mechanisms underlying ligand-dependent signaling in the ER/AP-1 pathway and demonstrate the usefulness of this biochemical approach.