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Background One in eight women will be affected by breast cancer in her lifetime. Approximately 75% of breast cancers express estrogen receptor alpha (ERα) and/or progesterone receptor and these receptors are markers for tumor dependence on estrogen. Anti-estrogenic drugs such as tamoxifen are commonly used to block estrogen-mediated signaling in breast cancer. However, many patients either do not respond to these therapies (de novo resistance) or develop resistance to them following prolonged treatment (acquired resistance). Therefore, it is imperative to continue efforts aimed at developing new efficient and safe methods of targeting ER activity in breast cancer. Methods AB215 is a chimeric ligand assembled from sections of Activin A and BMP2. BMP2’s and AB215’s inhibition of breast cancer cells growth was investigated. In vitro luciferase and MTT proliferation assays together with western blot, RT_PCR, and mRNA knockdown methods were used to determine the mechanism of inhibition of estrogen positive breast cancer cells growth by BMP2 and AB215. Additionally in vivo xenograft tumor model was used to investigate anticancer properties of AB215. Results Here we report that AB215, a chimeric ligand assembled from sections of Activin A and BMP2 with BMP2-like signaling, possesses stronger anti-proliferative effects on ERα positive breast cancer cells than BMP2. We further show that AB215 inhibits estrogen signaling by inducing expression of inhibitor of DNA binding proteins (IDs). Specifically, we demonstrate that knockdown of ID proteins attenuates the anti-estrogen effects of AB215. Remarkably, we find that AB215 is more effective than tamoxifen in suppressing tumor growth in a xenograft model. Conclusion This study shows that IDs have profound role to inhibit estrogen signaling in ERα positive breast cancer cells, and that engineered TGF-beta ligands may have high therapeutic value. Electronic supplementary material The online version of this article (doi:10.1186/1471-2407-14-549) contains supplementary material, which is available to authorized users.