Estrogen biosynthesis from C(19) steroids is catalyzed by aromatase cytochrome P450. Aromatase is expressed in breast adipose tissue through the use of a distal, cytokine-responsive promoter (promoter I.4). Breast tumors, however, secrete soluble factors that stimulate aromatase expression through an alternative proximal promoter, promoter II. In other estrogenic tissues such as ovaries, transcription from promoter II requires the presence of the Ftz-F1 homologue steroidogenic factor-1 (SF-1); adipose tissue, however, does not express SF-1. We have explored the hypothesis that in adipose tissue, an alternative Ftz-F1 family member, liver receptor homologue-1 (LRH-1), substitutes for SF-1 in driving transcription from promoter II. In transient transfection assays using 3T3-L1 preadipocytes, promoter II reporter constructs were modestly (2-3-fold) stimulated by either treatment with activators of protein kinases A or C (PKA/C) or by cotransfection with LRH-1. In combination, these treatments synergistically activated promoter II (>30-fold). Induction by LRH-1 (but not by PKA/C) required an AGGTCA motif at -130 base pairs, to which LRH-1 bound in gel shift assays. Activity of GAL4-LRH-1 fusion proteins was not altered by activators of PKA or PKC. Quantitative real-time PCR revealed that LRH-1 (but not SF-1) is expressed in the preadipocyte fraction of human adipose tissue at levels comparable with that of liver. Differentiation of cultured human preadipocytes into mature adipocytes was associated with a time-dependent induction of peroxisome proliferator-activated receptor-gamma (PPARgamma), and rapid loss of LRH-1 and aromatase expression. We conclude that LRH-1 is a preadipocyte-specific nuclear receptor that regulates expression of aromatase in adipose tissue. Alterations in LRH-1 expression and/or activity in adipose tissue could therefore have considerable effects on local estrogen production and breast cancer development.