Oestrogen (E2) is known to promote the proliferation of thyroid papillary carcinoma cells (KAT5). However, the molecular mechanism responsible is not well understood. In the study reported herein, the localization of ER alpha (ERα) and beta (ERβ) in KAT5 and anaplastic carcinoma cells (FRO) was studied by immunofluorescence staining and by immunoblotting the proteins in subcellular fractions. Cell proliferation and apoptosis were also determined together with the expression of relevant proteins. The pattern of the subcellular localization of ERα and ERβ differed between papillary and anaplastic cancer. Upon E2 treatment, the level of ERα increased in the nuclei of papillary cancer cells but ERβ remained unchanged. The level of mitochondrial ERβ surpassed that of ERα in anaplastic cancer cells. The different locations of ERα and ERβ in KAT5 and FRO agreed with the finding that E2 promoted the proliferation of KAT5 but inhibited or did not affect that of FRO cells, and with the proposed functions of these two receptors. E2 inhibited the level of Bax in the mitochondria of papillary cancer, followed by a decrease of cytochrome c and/or apoptosis-inducing factor (AIF) release from the mitochondria into the cytosol. However, in anaplastic cancer, E2 promoted the expression of Bax in the mitochondria and the release of cytochrome c and/or AIF from mitochondria into the cytosol. Our results may explain the differences in epidemiology and responses to anti-tumour therapy between papillary and anaplastic cancer in terms of the subcellular localization of ER isoforms. In conclusion, the findings provide evidence to support the observation that E2 is an important factor in the development of thyroid cancer. The subcellular localization of ERα and ERβ may account for the different pathogenesis of thyroid papillary and anaplastic cancers. Copyright © 2007 Pathological Society of Great Britain and Ireland. Published by John Wiley & Sons, Ltd.