Oestrogen receptor (ER) is a good prognostic marker for the treatment of breast cancers. Upregulation of metastatic tumour antigen 1 (MTA1) is associated with the invasiveness and metastatic potential of several human cancers and acts as a co-repressor of nuclear ER-alpha. Here we identify a naturally occurring short form of MTA1 (MTA1s) that contains a previously unknown sequence of 33 amino acids with an ER-binding motif, Leu-Arg-Ile-Leu-Leu (LRILL). MTA1s localizes in the cytoplasm, sequesters ER in the cytoplasm, and enhances non-genomic responses of ER. Deleting the LRILL motif in MTA1s abolishes its co-repressor function and its interaction with ER, and restores nuclear localization of ER. Dysregulation of human epidermal growth factor receptor-2 in breast cancer cells enhances the expression of MTA1s and the cytoplasmic sequestration of ER. Expression of MTA1s in breast cancer cells prevents ligand-induced nuclear translocation of ER and stimulates malignant phenotypes. MTA1s expression is increased in human breast tumours with no or low nuclear ER. The regulation of the cellular localization of ER by MTA1s represents a mechanism for redirecting nuclear receptor signalling by nuclear exclusion.