The KCNE2 gene encodes a single transmembrane domain protein that modulates a variety of K+ channel functions in various tissues. Here we show that cardiac KCNE2 transcript levels are approximately 10-fold upregulated at the end of pregnancy. This upregulation was mimicked by 17-beta estradiol but not by 5alpha-dihydrotestosterone treatments in ovariectomized mice. To investigate the mechanism of KCNE2 transcriptional regulation by estrogen, we experimentally identified KCNE2 transcription start sites, delineated its gene structure and characterized its promoter region. Estrogen treatment stimulated KCNE2 promoter activity in a dose-dependent manner and ICI 182,780 blocked estrogen stimulation. A direct genomic mechanism was demonstrated by (i) the loss of estrogen responsiveness in the presence of a DNA-binding domain mutant estrogen receptor alpha or mutant KCNE2 ERE and (ii) binding of ERalpha to the KCNE2 ERE. These findings show that a genomic mechanism of estrogen action alters KCNE2 expression, which may have important physiological implications.