We recently reported that the breast carcinoma amplified sequence-3 (BCAS3) gene is regulated by estrogen receptor alpha (ER). However, the role of ER coactivators in the regulation of BCAS3 expression remains unknown, and information regarding the function of the BCAS3 protein is lacking. Here, we define the contribution of ER coactivators in BCAS3 regulation and identify BCAS3 itself as an ER coactivator in breast cancer cells. We found that PELP1, a newly described ER coregulator, is recruited to BCAS3 chromatin and activates its expression. Analysis of the BCAS3 sequence for functional motifs and evidence from biochemical fractionation suggested that BCAS3 acts as a transcriptional coactivator. Results from chromatin immunoprecipitation, reporter assays, and expression studies further validated the coactivator function of BCAS3 for ER. BCAS3 physically associated with histone H3 and histone acetyltransferase complex protein P/CAF and possessed histone acetyltransferase activity. Unexpectedly, BCAS3 required PELP1 to function as a coactivator in ER transactivation activity. In brief, these results highlight a mechanism whereby ER activation triggers a positive feedback loop leading to signal amplification in the cell.