We describe here the design and construction of an optimized chimeric enzyme that combines the ligand-binding domain of the human estrogen receptor β with the highly sensitive reporter enzyme thymidylate synthase. As in our previously reported fusion based on estrogen receptor α, ligand-induced conformational changes that take place in the receptor induce distinct levels of enzymic efficiency in the thymidylate synthase domain. A simple bacterial reporter system for thymidylate synthase function allows the presence of hormone-like compounds to be readily detected by growth phenotypes in appropriate Escherichia coli auxotrophs. Optimization of the earlier design and incorporation of the estrogen receptor β have greatly increased the sensitivity and reliability of this system, making it practical for screening potentially therapeutic compounds, and for the detection and identification of estrogenic pollutants and phytoestrogens. We demonstrate the effectiveness of this system in the correct identification of a variety of agonistic and antagonistic compounds from a library of experimental and therapeutic compounds, and in the detection of a number of known environmental estrogens. Further, we show that the sensitivity of this system approaches and even surpasses that of conventional systems with low-affinity binders, implying a significant impact in the identification of estrogenic industrial byproducts. Finally, by using this simple screening tool we identified two structurally novel and mechanistically unusual estrogen receptor modulators, and predicted their (now verified) pharmacological profiles in human cells. These compounds are currently being developed as potential therapeutics by their inventors. Thus the system has shown utility in detection, identification and discovery of estrogenic compounds, and this strategy is likely to work with additional nuclear hormone receptor targets.