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Estradiol-17[Beta] ([E.sub.2]) acts through the estrogen receptor (ER) to regulate uterine growth and functional differentiation. To determine whether [E.sub.2] 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 [E.sub.2] or oil a week after ovariectomy. Epithelial labeling index and ER expression were determined by [3H] thymidine autoradiography and immuno-histochemistry, respectively. In tissue recombinants containing wt-S (wt-S + wt-E, wt-S + ko-E), [E.sub.2] 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 [E.sub.2] despite epithelial ER expression in ko-S + wt-E grafts. In conclusion, these data demonstrate that epithelial ER is neither necessary nor sufficient for [E.sub.2]-induced uterine epithelial proliferation. Instead, [E.sub.2] 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.