Unliganded thyroid hormone receptors (TRs) interact with corepressors and repress basal transcription of target genes in cotransfection and in vitro studies. Currently, little is known about the function of corepressors in vivo. We thus used a mouse albumin promoter to generate several transgenic mouse lines that overexpressed a dominant negative mutant corepressor, NCoRi, in liver. The transgenic mice had normal liver weight, appearance, and minimal changes in enzyme activity. To study the effects of NCoRi on transcription of hepatic target genes, we examined T3-regulated gene expression of hypo- and hyperthyroid transgenic mice. In hypothyroid mice, hepatic expression of Spot 14, Bcl-3, glucose 6-phosphatase, and 5'-deiodinase mRNA was higher in transgenic mice than littermate controls whereas these genes were induced to similar levels in T3-treated mice. Derepression was not observed for malic enzyme mRNA expression in hypothyroid mice. Thus, NCoRi selectively blocked basal transcription of several thyroid hormone-responsive genes but had no effect on ligand-mediated transcription. Additionally, compensatory increases in endogenous SMRT and NCoR mRNA were observed in hypothyroid transgenic mice. Interestingly, hepatocyte proliferation as detected by BrdUrd incorporation was increased in transgenic mice. The gene profile in transgenic mouse livers was studied by cDNA microarray, and several genes related to cell proliferation were induced. In summary, our studies show that NCoR plays important roles in mediating basal repression by TRs and may prevent cellular proliferation in vivo.