By regulating activities and expression levels of key signaling molecules, estrogens control mechanisms that are responsible for crucial cellular functions. Ligand binding to estrogen receptor (ER) leads to conformational changes that regulate the receptor activity, its interaction with other proteins and DNA. In the cytoplasm, receptor interactions with kinases and scaffolding molecules regulate cell signaling cascades (extranuclear/nongenomic action). In the nucleus, estrogens control a repertoire of coregulators and other auxiliary proteins that are associated with ER, which in turn determines the nature of regulated genes and level of their expression (genomic action). The combination of genomic and nongenomic actions of estrogens ultimately confers the cell-type and tissue-type selectivity. Recent studies have revealed some important new insights into the molecular mechanisms underlying ER action, which may help to explain the functional basis of existing selective ER modulators (SERMs) and provide evidence into how ER might be selectively targeted to achieve specific therapeutic goals. In this review, we will summarize some new molecular details that relate to estrogen signaling. We will also discuss some new strategies that may potentially lead to the development of functionally selective ER modulators that can separate between the beneficial, prodifferentiative effects in bone, the cardiovascular system and the CNS as well as the "detrimental," proliferative effects in reproductive tissues and organs.