The thyroid hormone receptors (TR) are members of the nuclear receptor family of ligand-mediated transcription factors. The large region of TR that lies C-terminal to its DNA-binding domain subserves functions of ligand binding, dimerization, and transactivation. Little is known regarding the structural or functional determinants of these processes. We have utilized genetic screening in the yeast Saccharomyces cerevisiae to identify residues involved in these functions. Random mutations of the rat TR beta 1 isoform between amino acid residues 179 and 456 were screened, and mutants with reduced hormone-dependent activation of reporter gene activity were isolated. In this paper we describe the characterization of a class of mutants that exhibit a dissociation between hormone binding and transcriptional activation. These mutants retained hormone binding (> 15% of the wild-type level) yet failed to transactivate a reporter gene. A number of these mutations occurred within the D region, which links the DNA-binding and ligand-binding domains of the receptor. One subset of these mutations abrogated DNA binding, supporting a role of the D region in this process. The remainder retain DNA binding and thus highlight residues critical for receptor activation. In addition, an unexpected group of "superactivator" mutations that led to enhanced hormone-dependent activation in S. cerevisiae were found. These mutations localized to the carboxy-terminal portion of the receptor in a region which contains elements conserved across the superfamily of nuclear receptors. The hormone-dependent phenotype of these superactivator mutations suggests an important role of this segment in ligand-mediated transcriptional activation.