Estrogen receptor α (ERα) is an important driver and therapeutic target in ∼70% of breast cancers. How ERα drives breast carcinogenesis is not fully understood. In this study, we show that ERα is a negative regulator of type I interferon (IFN) response. Activation of ERα by its natural ligand estradiol inhibits IFN-β-induced transcription of downstream IFN-stimulated genes (ISGs), whereas ERα deficiency or the stimulation with its antagonist fulvestrant has opposite effects. Mechanistically, ERα induces the expression of the histone 2A variant H2A.Z to restrict the engagement of the IFN-stimulated gene factor 3 (ISGF3) complex to the promoters of ISGs and also interacts with STAT2 to disrupt the assembly of the ISGF3 complex. These two events mutually lead to the inhibition of ISG transcription induced by type I IFNs. In a xenograft mouse model, fulvestrant enhances the ability of IFN-β to suppress ERα+ breast tumor growth. Consistently, clinical data analysis reveals that ERα+ breast cancer patients with higher levels of ISGs exhibit higher long-term survival rates. Taken together, our findings suggest that ERα inhibits type I IFN response via two distinct mechanisms to promote breast carcinogenesis.