Estradiol-17β (E₂) acts through the estrogen receptor (ER) to regulate uterine growth and functional differentiation. To determine whether E₂ elicits epithelial mitogenesis through epithelial ER versus indirectly via ER-positive stromal cells, uteri from adult ER-deficient ER knockout (ko) mice and neonatal ER-positive wild-type (wt) BALB/c mice were used to produce the following tissue recombinants containing ER in epithelium (E) and/or stroma (S), or lacking ER altogether: wt-S + wt-E, wt-S + ko-E, ko-S + ko-E, and ko-S + wt-E. Tissue recombinants were grown for 4 weeks as subrenal capsule grafts in intact female nude mice, then the hosts were treated with either E₂ or oil a week after ovariectomy. Epithelial labeling index and ER expression were determined by [³H]thymidine autoradiography and immunohistochemistry, respectively. In tissue recombinants containing wt-S (wt-S + wt-E, wt-S + ko-E), E₂ induced a similar large increase in epithelial labeling index compared with oil-treated controls in both types of tissue recombinants despite the absence of epithelial ER in wt-S + ko-E tissue recombinants. This proliferative effect was blocked by an ER antagonist, indicating it was mediated through ER. In contrast, in tissue recombinants prepared with ko-S (ko-S + ko-E and ko-S + wt-E), epithelial labeling index was low and not stimulated by E₂ despite epithelial ER expression in ko-S + wt-E grafts. In conclusion, these data demonstrate that epithelial ER is neither necessary nor sufficient for E₂-induced uterine epithelial proliferation. Instead, E₂ induction of epithelial proliferation appears to be a paracrine event mediated by ER-positive stroma. These data in the uterus and similar studies in the prostate suggest that epithelial mitogenesis in both estrogen and androgen target organs are stromally mediated events.