Squamous metaplasia (SQM) is a specific phenotype in response to oestrogen in the prostate and oestrogen receptor (ER) α is required to mediate this response. Previous studies utilizing tissue recombination with seminal vesicle (SV) mesenchyme and prostatic ductal tips from wild type and ERαKO mice suggested that both epithelial and stromal ERα are necessary for SQM. However, tissue recombination is conducted in the renal capsule of immune-deficient mice, in which the microenvironment is different from normal prostate microenvironment in the intact mice. Furthermore, whether the requirement of stromal ERα in the SV for developing SQM is the same as in the prostate is unknown. Therefore, there is a clear need to evaluate the respective roles of ERα in prostate epithelial versus stromal compartments in the intact mouse. Here we generated a mouse model that has selectively lost ERα in either stromal (FSP-ERαKO) or epithelial prostate cells (pes-ERαKO) to determine the requirements of ERα for oestrogen-stimulated prostate proliferation and SQM. Our results indicated that FSP-ERαKO prostates develop full and uniform SQM, which suggests that loss of the majority (∼65%) of stromal ERα will not influence oestrogen-mediated SQM. In contrast, loss of epithelial ERα inhibits oestrogen-mediated prostate growth and SQM evidenced by decreasing cytokertin 10 positive squamous cell stratification and differentiation, by reduced ERα protein expression in SQM compared to wild type mice ERα, and by the presence of normal proliferative activities in the oestrogen-treated pes-ERαKO prostates. These in vivo results suggest that epithelial ERα is required for oestrogen-mediated proliferative response and could be an appropriate target for preventing aberrant oestrogen signalling in the prostate. Copyright © 2011 Pathological Society of Great Britain and Ireland. Published by John Wiley & Sons, Ltd.