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The interaction of estradiol with uterine cells involves the association of the hormone with an extranuclear receptor protein, followed by temperature dependent translocation of the resulting complex to the nucleus. During this process, the steroid binding unit of the protein undergoes an alteration, called "receptor transformation," that can be recognized by an increase in its sedimentation rate from 3.8S to 5.2S, and by its acquisition of the ability to bind to isolated uterine nuclei and to alleviate a tissue specific deficiency in the RNA synthesizing capacity of such nuclei. Receptor transformation can be effected in the absence of nuclei by warming uterine cytosol with estradiol. This preparation of transformed complex resembles that extracted from nuclei both in its sedimentation rate (5.3S) and in its ability to bind to uterine nuclei and augment RNA synthesis, properties that are not shown by the native complex. It is proposed that receptor transformation is an important step in estrogen action and that a principal role of the hormone is to induce conversion of the receptor protein to a biochemically functional form.