Histone methyltransferase G9a has been understood primarily as a corepressor of gene expression, but we showed previously that G9a positively regulates nuclear receptor-mediated transcription in reporter gene assays. Here, we show that endogenous G9a contributes to the estradiol (E(2))-dependent induction of some endogenous target genes of estrogen receptor (ER)α in MCF-7 breast cancer cells while simultaneously limiting the E(2)-induced expression of other ERα target genes. Thus, G9a has a dual and selective role as a coregulator for ERα target genes. The ERα binding regions associated with the pS2 gene, which requires G9a for E(2)-induced expression, are transiently occupied by G9a at 15 min after beginning E(2) treatment, suggesting that G9a coactivator function is by direct interaction with ERα target genes. Transient reporter gene assays with deletion mutants of G9a demonstrated that domains previously associated with the corepressor functions of G9a (C-terminal methyltransferase domain, ankyrin repeat domain, and cysteine-rich domain) were unnecessary for G9a coactivator function in ERα-mediated transcription. In contrast, the N-terminal domain of G9a was necessary and sufficient for enhancement of ERα-mediated transcription and for E(2)-induced occupancy of G9a on ERα binding sites associated with endogenous target genes of ERα. In addition to a previously identified activation domain, this region contains a previously uncharacterized ligand-dependent ERα binding function, indicating how G9a is recruited to the target genes. Therefore, the coactivator and corepressor functions of G9a involve different G9a domains and different molecular mechanisms.