Steroid hormone receptors are important regulators of development and physiology in bilaterian animals, but the role of steroid signaling in cnidarians has been contentious. Cnidarians produce steroids, including A-ring aromatic steroids with a side-chain, but these are probably made through pathways different than the one used by vertebrates to make their A-ring aromatic steroids. Here we present comparative genomic analyses indicating the presence of a previously undescribed nuclear receptor family within medusozoan cnidarians, that we propose to call NR3E. This family predates the diversification of ERR/ER/SR in bilaterians, indicating that the first NR3 evolved in the common ancestor of the placozoan and cnidarian-bilaterian with lineage-specific loss in the anthozoans, even though multiple species in this lineage have been shown to produce aromatic steroids, whose function remain unclear. We discovered serendipitously that a cytoplasmic factor within epidermal cells of transgenic Hydra vulgaris can trigger the nuclear translocation of heterologously expressed human ER?. This led us to hypothesize that aromatic steroids may also be present in the medusozoan cnidarian lineage, which includes Hydra, and may explain the translocation of human ER?. Docking experiments with paraestrol A, a cnidarian A-ring aromatic steroid, into the ligand-binding pocket of Hydra NR3E indicates that, if an aromatic steroid is indeed the true ligand, which remains to be demonstrated, it would bind to the pocket through a partially distinct mechanism from the manner in which estradiol binds to vertebrate ER.