Estrogens are effective in the treatment of prostate cancer; however, the effects of estrogens on prostate cancer are enigmatic. In this study, we demonstrated that estrogen (17β-estradiol, E2) has biphasic effects on prostate tumor growth. A lower dose of E2 increased tumor growth in mouse xenograft models using DU145 and PC-3 human prostate cancer cells, whereas a higher dose significantly decreased tumor growth. We found that anchorage-independent apoptosis in these cells was inhibited by E2 treatment. Similarly,in vivoangiogenesis was suppressed by E2. Interestingly, these effects of E2 were abolished by knockdown of either estrogen receptor β (ERβ) or Krüppel-like zinc-finger transcription factor 5 (KLF5). In addition, E2 suppressed KLF5-mediated transcription through ERβ, which inhibits pro-apoptoticFOXO1and pro-angiogenicPDGFAexpression. Furthermore, we revealed that a non-agonistic ER ligand GS-1405 inhibitedFOXO1andPDGFA expression through ERβ and KLF5 pathway, and regulated prostate tumor growth without ERβ transactivation. Therefore, these results suggest that E2 biphasically modulates prostate tumor formation by regulating KLF5-dependent transcription through ERβ and provide a new strategy for designing ER modulators, which will be able to regulate prostate cancer progression with minimal adverse effects due to ER transactivation.