Three interconvertible forms of the estrogen receptor have been identified in the oviduct of estrogen-stimulated chicks. The non-estradiol binding form (Rnb) can be converted to the lower affinity binding form (Ry, Kd = 0.8 nM) by a process requiring the gamma-phosphoryl moiety of ATP. The enzymatic activity (Fy) essential for this "receptor potentiation" has been isolated from oviduct cytosol using ammonium sulfate fractionation, DEAE chromatography, and HPLC size-exclusion chromatography. The potentiation appears to require both kinase and phosphatase activities. The Fy kinase characteristically phosphorylates casein, histones, and glycogen synthase. Comparison of the kinase with casein kinase II, which also phosphorylates casein and glycogen synthase, indicates that Fy represents a distinct protein kinase since its activity is not stimulated by spermine or inhibited by heparin. Fy-mediated conversion of Rnb to Ry is blocked by the phosphatase inhibitors vanadate, fluoride, and pyrophosphate. The substrate specificity of the Fy phosphatase activity is distinct from that of the two well-characterized protein phosphatases 1 and 2A. Moreover, the requirement for Fy phosphatase activity in converting Rnb to Ry could not be mimicked by its substitution with purified protein phosphatases 1 or 2A. The unique substrate specificity of the oviduct protein phosphatase and protein kinase, which are apparently necessary to confer estradiol binding characteristics to the receptor, implies that these enzymes play a key role in the control of the estrogen receptor in its function as a transcription factor.