Estrogen receptors ERα and ERβ share considerable sequence homology yet exert opposite effects on breast cancer cell proliferation. While the proliferative role of ERα in breast tumors is well characterized, it is not clear whether the antitumor activity of ERβ can be mobilized in breast cancer cells. Here, we have shown that phosphorylation of a tyrosine residue (Y36) present in ERβ, but not in ERα, dictates ERβ-specific activation of transcription and is required for ERβ-dependent inhibition of cancer cell growth in culture and in murine xenografts. Additionally, the c-ABL tyrosine kinase and EYA2 phosphatase directly and diametrically controlled the phosphorylation status of Y36 and subsequent ERβ function. A nonphosphorylatable, transcriptionally active ERβ mutant retained antitumor activity but circumvented control by upstream regulators. Phosphorylation of Y36 was required for ERβ-mediated coactivator recruitment to ERβ target promoters. In human breast cancer samples, elevated phosphorylation of Y36 in ERβ correlated with high levels of c-ABL but low EYA2 levels. Furthermore, compared with total ERβ, the presence of phosphorylated Y36-specific ERβ was strongly associated with both disease-free and overall survival in patients with stage II and III disease. Together, these data identify a signaling circuitry that regulates ERβ-specific antitumor activity and has potential as both a prognostic tool and a molecular target for cancer therapy.