We have investigated the effects of tyrosine phosphorylation on the estradiol-binding mechanism and binding capacity of the human estrogen receptor (hER). The wild type hER and a point mutant form of the hER, in which tyrosine 537 was mutated to phenylalanine (Y537F hER), were expressed in Sf9 insect cells. The wild type hER, but not the Y537F hER, reacted with a anti-phosphotyrosine monoclonal antibody, indicating that tyrosine 537 was the only tyrosine phosphorylated on the hER. Scatchard and Hill analyses of the the binding interaction of [3H]estradiol with the wild type hER indicated that the addition of millimolar phosphotyrosine, but not tyrosine, phosphate, or phosphoserine, abolished the cooperative binding mechanism of the hER. These observations are consistent with the idea that phosphotyrosine blocks dimerization and site-site interactions between the hER monomers. The wild type hER bound 10-fold more [3H]estradiol than the Y537F hER. Treatment of the purified wild type hER with a tyrosine phosphatase decreased the binding capacity of the hER by approximately 90%, whereas, a serine/threonine phosphatase had no effect. The estrogen-binding capacity of the tyrosine- dephosphorylated hER was completely restored by rephosphorylation of tyrosine 537 with p60(c-src), a tyrosine kinase. These results indicate that p60(c- src) can restore estrogen binding to the tyrosine-dephosphorylated hER and that dimerization and cooperative site-site interaction of the hER occur via a phosphotyrosine-binding interaction.