The estrogen receptor alpha (ER) is a ligand-dependent transcription factor that plays a critical role in the development and progression of breast cancer, in part, by regulating target genes involved in cellular proliferation. To identify novel components that affect the ER transcriptional response, we performed a genetic screen in yeast and identified RDI1, a Rho guanine nucleotide dissociation inhibitor (Rho GDI), as a positive regulator of ER transactivation. Overexpression of the human homologue of RDI1, Rho GDIalpha, increases ERalpha, ERbeta, androgen receptor, and glucocorticoid receptor transcriptional activation in mammalian cells but not activation by the unrelated transcription factors serum response factor and Sp1. In contrast, expression of constitutively active forms of RhoA, Rac1, and Cdc42 decrease ER transcriptional activity, suggesting that Rho GDI increases ER transactivation by antagonizing Rho function. Inhibition of RhoA by expression of either the Clostridium botulinum C3 transferase or a dominant negative RhoA resulted in enhanced ER transcriptional activation, thus phenocopying the effect of Rho GDI expression on ER transactivation. Together, these findings establish the Rho GTPases as important modulators of ER transcriptional activation. Since Rho GTPases regulate actin polymerization, our findings suggest a link between the major regulators of cellular architecture and steroid receptor transcriptional response.