Genomic analysis has recently identified multiple ESR1 gene translocations in estrogen receptor alpha-positive (ERα+) metastatic breast cancer (MBC) that encode chimeric proteins whereby the ESR1 ligand binding domain (LBD) is replaced by C-terminal sequences from many different gene partners. Here we functionally screened 15 ESR1 fusions and identified 10 that promoted estradiol-independent cell growth, motility, invasion, epithelial-to-mesenchymal transition, and resistance to fulvestrant. RNA sequencing identified a gene expression pattern specific to functionally active ESR1 gene fusions that was subsequently reduced to a diagnostic 24-gene signature. This signature was further examined in 20 ERα+ patient-derived xenografts and in 55 ERα+ MBC samples. The 24-gene signature successfully identified cases harboring ESR1 gene fusions and also accurately diagnosed the presence of activating ESR1 LBD point mutations. Therefore, the 24-gene signature represents an efficient approach to screening samples for the presence of diverse somatic ESR1 mutations and translocations that drive endocrine treatment failure in MBC. SIGNIFICANCE: This study identifies a gene signature diagnostic for functional ESR1 fusions that drive poor outcome in advanced breast cancer, which could also help guide precision medicine approaches in patients harboring ESR1 mutations.