Abstract Estradiol receptors (ER), ERα and ERβ, are ligand-dependent transcription factors that regulate gene expression. Human and murine genetics suggest that ERα is the key target for estradiol action on bone, uterus and breast. To date, the molecular mode of action of estradiol and selective estradiol receptor modulators (SERMs) on bone is not fully understood. This is exemplified by a lack of in vitro assays that reliably predict SERM agonist activities in vivo. We hypothesized that ligand-dependent ERα transrepression, via protein–protein interactions at AP1, may predict estrogenic effects on bone. We modeled this using the MMP1 promoter, which encodes an AP1 binding site. We show that ICI-182780, raloxifene, 4-hydroxytamoxifen and estradiol all exhibit differential agonistic activities on the MMP1 promoter by suppressing activity by 20–80%. Transrepression efficacy and potency correlated with both uterotrophic ( R 2 = 0.98) and osteoprotective ( R 2 = 0.80) potential in the ovariectomized rat. This identifies MMP1 promoter transrepression as an agonist activity commonly shared by AF2 agonists and “antagonists” alike. Mutation analysis showed that the repression by estradiol and SERMs required correct amino acid sequences in the AF-2 domain. For instance, L540Q AF2 mutation did not alter responses to raloxifene, although it greatly increased responses to ICI-182780 (threefold) and reduced estradiol's effect by 20%. Furthermore, all tested ligands repressed the MMP1 promoter through the L540Q mutant with identical efficacy. Together, these data suggest that estradiol and SERMs share common agonist transcriptional activity via protein–protein interactions at AP1.