The crystal structure of the rat alpha 1 thyroid hormone receptor ligand-binding domain bound with a thyroid hormone agonist reveals that ligand is completely buried within the domain as part of the hydrophobic core. In addition, the carboxy-terminal activation domain forms an amphipathic helix, with its hydrophobic face constituting part of the hormone binding cavity. These observations suggest a structural role for ligand, in establishing the active conformation of the receptor, that is likely to underlie hormonal regulation of gene expression for the nuclear receptors.