The purpose of this study was to investigate the effects of 17-β-estradiol (E2)-induced reactive oxygen species (ROS) on the induction of mammary tumorigenesis. We found that ROS-induced by repeated exposures to 4-hydroxy-estradiol (4-OH-E2), a predominant catechol metabolite of E2, caused transformation of normal human mammary epithelial MCF-10A cells with malignant growth in nude mice. This was evident from inhibition of estrogen-induced breast tumor formation in the xenograft model by both overexpression of catalase as well as by co-treatment with Ebselen. To understand how 4-OH-E2 induces this malignant phenotype through ROS, we investigated the effects of 4-OH-E2 on redox-sensitive signal transduction pathways. During the malignant transformation process we observed that 4-OH-E2 treatment increased AKT phosphorylation through PI3K activation. The PI3K-mediated phosphorylation of AKT in 4-OH-E2-treated cells was inhibited by ROS modifiers as well as by silencing of AKT expression. RNA interference of AKT markedly inhibited 4-OH-E2-induced in vitro tumor formation. The expression of cell cycle genes, cdc2, PRC1 and PCNA and one of transcription factors that control the expression of these genes - nuclear respiratory factor-1 (NRF-1) was significantly up-regulated during the 4-OH-E2-mediated malignant transformation process. The increased expression of these genes was inhibited by ROS modifiers as well as by silencing of AKT expression. These results indicate that 4-OH-E2-induced cell transformation may be mediated, in part, through redox-sensitive AKT signal transduction pathways by up-regulating the expression of cell cycle genes cdc2, PRC1 and PCNA, and the transcription factor - NRF-1. In summary, our study has demonstrated that: (i) 4-OH-E2 is one of the main estrogen metabolites that induce mammary tumorigenesis and (ii) ROS-mediated signaling leading to the activation of PI3K/AKT pathway plays an important role in the generation of 4-OH-E2-induced malignant phenotype of breast epithelial cells. In conclusion, ROS are important signaling molecules in the development of estrogen-induced malignant breast lesions.