Estrogen Receptor α (ERα) is a major lineage determining transcription factor (TF) in mammary gland development. Dysregulation of ERα-mediated transcriptional program results in cancer. Transcriptomic and epigenomic profiling of breast cancer cell lines has revealed large numbers of enhancers involved in this regulatory program, but how these enhancers encode function in their sequence remains poorly understood. A subset of ERα-bound enhancers are transcribed into short bidirectional RNA (enhancer RNA or eRNA), and this property is believed to be a reliable marker of active enhancers. We therefore analyze thousands of ERα-bound enhancers and build quantitative, mechanism-aware models to discriminate eRNAs from non-transcribing enhancers based on their sequence. Our thermodynamics-based models provide insights into the roles of specific TFs in ERα-mediated transcriptional program, many of which are supported by the literature. We use in silico perturbations to predict TF-enhancer regulatory relationships and integrate these findings with experimentally determined enhancer-promoter interactions to construct a gene regulatory network. We also demonstrate that the model can prioritize breast cancer-related sequence variants while providing mechanistic explanations for their function. Finally, we experimentally validate the model-proposed mechanisms underlying three such variants.