Three isoforms of a novel member of the steroid hormone nuclear receptor superfamily related to the retinoic acid receptors have been identified. The three isoforms, referred to as ROR alpha 1, ROR alpha 2, and ROR alpha 3, share common DNA- and putative ligand-binding domains but are characterized by distinct amino-terminal domains generated by alternative RNA processing. An exon encoding a functionally important subregion of the amino-terminal domain of the ROR alpha 2 isoform resides on the opposite strand of a cytochrome c-processed pseudogene. Binding site selection using in vitro-synthesized proteins reveals that the ROR alpha 1 and ROR alpha 2 isoforms bind DNA as monomers to hormone response elements composed of a 6-bp AT-rich sequence preceding a half-site core motif PuGGTCA (RORE). However, ROR alpha 1 and ROR alpha 2 display different binding specificities: ROR alpha 1 binds to and constitutively activates transcription from a large subset of ROREs, whereas ROR alpha 2 recognizes ROREs with strict specificity and displays weaker transcriptional activity. The differential DNA-binding activity of each isoform maps to their respective amino-terminal domains. Whereas truncation of the amino-terminal domain diminishes the ability of ROR alpha 1 to bind DNA, a similar deletion relaxes ROR alpha 2-binding specificity to that displayed by ROR alpha 1. Remarkably, transfer of the entire amino-terminal region of ROR alpha 1 or amino-terminal deletion of ROR alpha 2 confers RORE-binding specificities to heterologous receptors. These results demonstrate that the amino-terminal domain and the zinc finger region work in concert to confer high affinity and specific DNA-binding properties to the ROR isoforms and suggest a novel strategy to control DNA-binding activity of nuclear receptors.