Thyroid hormone receptors (TRs) bind to response elements (TREs) located in the promoter region of target genes and modulate their transcription. The effects of TRs require the presence of coregulators that act as adaptor molecules between TRs and complexes that are involved in chromatin remodeling or that directly contact the basal transcription machinery. Using the yeast two-hybrid system, we identified a new interacting partner for TRs: GRP1 (general receptor for phosphoinositides-1), a nucleotide exchange factor, which had never been shown to interact with nuclear receptors. We reconfirmed the interaction between TRs and GRP1 in yeast and glutathione-S-transferase pull-down assays, and determined the areas of TRs and GRP1 involved in the interaction. Coimmunoprecipitation studies demonstrated that the interaction between GRP1 and TRs takes place in the cytoplasm and the nucleus of mammalian cells. To assess functional consequences of the interaction, we used transient transfection of CV-1 cells with TR and GRP1 expression vectors and luciferase reporter genes. On positive TREs, GRP1 decreased activation by 45-60%. On the negative TREs it increased repression by blunting the activation in the absence of T3, except for TRbeta2, which was not affected. Using EMSA, we have determined that addition of GRP1 diminishes the formation of TR/TR homodimers and TR/retinoid X receptor heterodimers on TREs, which could explain the effect of GRP1 on transcription. Furthermore, protein interaction assays using increasing concentrations of double-stranded TREs show a dose-dependent decrease of the interaction between GRP1 and TRs. The homo/heterodimers formed by TRs and retinoic X receptor-alpha were not influenced by the presence of GRP1, also suggesting that GRP1 interferes directly with DNA binding. Taken together, these data provide evidence that GRP1 is a new corepressor for TRs, which modulates both positive and negative regulation by T3 by decreasing TR-complex formation on TREs.