In situ estrogen synthesis is implicated in tumor cell proliferation through autocrine or paracrine mechanisms especially in post-menopausal women. Several recent studies demonstrated activity of aromatase, an enzyme that play critical role in estrogen synthesis in breast tumors. Proline-, glutamic acid- and leucine-rich-protein-1 (PELP1/MNAR) is an ER-coregulator, and its expression is deregulated in breast tumors. In this study, we examined whether PELP1 promotes tumor growth by promoting local estrogen synthesis using breast cancer cells (MCF7) that stably over-express PELP1. Immunohistochemistry revealed increased aromatase expression in MCF7-PELP1-induced xenograft tumors. Real-time PCR analysis showed enhanced activation of the aromatase promoter in MCF7-PELP1 clones compared to MCF7 cells. Using a tritiated-water release assay, we demonstrated that MCF7-PELP1 clones exhibit increased aromatase activity compared to control MCF-7 cells. PELP1 deregulation uniquely upregulated aromatase expression via activation of aromatase promoter I.3/II and growth factor signaling enhanced PELP1 activation of aromatase. PELP1-mediated induction of aromatase requires functional Src and PI3K pathways. Mechanistic studies revealed that PELP1 interactions with ERR and PNRC2 lead to activation of aromatase. Immunohistochemistry analysis of breast tumor array showed increased expression of aromatase in DCIS and node-positive tumors compared to no or weak expression in normal breast tissue. Fifty-four percent (n=79) of PELP1 overexpressing tumors also overexpressed aromatase compared with 36% (n=47) in PELP1 low-expressing tumors. Our results suggest that PELP1 regulation of aromatase represent a novel mechanism for in situ estrogen synthesis leading to tumor proliferation by autocrine loop and open a new avenue for ablating local aromatase activity in breast tumors.