The C-terminal fragment of the beta-amyloid precursor protein produced after cleavage by gamma-secretase, namely, APPct or AICD, has been shown to form a multimeric complex with the adaptor protein Fe65 and to regulate transcription through the recruitment of the histone acetyltransferase Tip60. The present study shows that 17beta-estradiol inhibits the transcriptional and apoptotic activities of the APPct complex by a process involving the interaction of estrogen receptor alpha (ERalpha) with Fe65. ERalpha-Fe65 complexes were detected both in vitro and in the mouse brain, and recruitment of ERalpha to the promoter of an APPct target gene (KAI1) was demonstrated. Our studies reveal a novel mechanism of estrogen action, which may explain the well-known neuroprotective functions of estrogens as well as the complex role of this female hormone in the pathogenesis of neuronal degeneration diseases.