The steroid receptor coactivator 3 gene (SRC-3) (AIB1/ACTR/pCIP/RAC3/TRAM1) is a p160 family transcription coactivator and a known oncogene. Despite its importance, the functional regulation of SRC-3 remains poorly understood within a cellular context. Using a novel combination of live-cell, high-throughput, and fluorescent microscopy, we report SRC-3 to be a nucleocytoplasmic shuttling protein whose intracellular mobility, solubility, and cellular localization are regulated by phosphorylation and estrogen receptor alpha (ERalpha) interactions. We show that both chemical inhibition and small interfering RNA reduction of the mitogen-activated protein kinase/extracellular signal-regulated kinase 1/2 (MEK1/2) pathway induce a cytoplasmic shift in SRC-3 localization, whereas stimulation by epidermal growth factor signaling enhances its nuclear localization by inducing phosphorylation at T24, S857, and S860, known participants in the phosphocode that regulates SRC-3 activity. Accordingly, the cytoplasmic localization of a nonphosphorylatable SRC-3 mutant further supported these results. In the presence of ERalpha, U0126 also dramatically reduces (i) ligand-dependent colocalization of SRC-3 and ERalpha, (ii) the formation of ER-SRC-3 complexes in cell lysates, and (iii) SRC-3 targeting to a visible, ERalpha-occupied and -regulated prolactin promoter array. Taken together, these results indicate that phosphorylation coordinates SRC-3 coactivator function by linking the probabilistic formation of transient nuclear receptor-coactivator complexes with its molecular dynamics and cellular compartmentalization. Technically and conceptually, these findings have a new and broad impact upon evaluating mechanisms of action of gene regulators at a cellular system level.