A novel heterodimerization partner for thyroid hormone receptor. Peroxisome proliferator-activated receptor. Retinoid-like receptors play a central role in hormonal responses by forming heterodimers with other nuclear hormone receptors. In this study we have identified the peroxisome proliferator-activated receptor (PPAR) as a new thyroid hormone receptor (THR) auxiliary nuclear protein, heterodimerizing with THR in solution. Although these heterodimers do not recognize a classical thyroid hormone response element (TRE) characterized by direct repeat separated by four nucleotides (DR+4), PPAR behaves as a dominant negative regulator of thyroid hormone (TH) action. However, a TH-dependent positive effect is elicited by selective interaction of the THR beta-PPAR but not the THR alpha-PPAR heterodimer with a novel TRE (DR+2). The critical region of THR beta was mapped to 3 amino acids in the distal box of the DNA binding domain. Hence, PPAR can positively or negatively influence TH action depending on TRE structure and THR isotype.