Thyroid hormone (T3) responses are mediated by two receptors, TR alpha and TR beta, that have been shown to require heterodimer formation with the retinoid-X receptors for effective interaction with most T3-responsive elements (TRE). In addition, it has been shown recently that one type of TRE, an inverted palindrome (IP) with a 4-, 5-, or 6-base pair spacer, can also bind TR homodimers with high affinity. This binding, however, is sensitive to T3, which suggests that TR homodimers could have important biological roles as T3-sensitive repressors. Here we have analyzed eight natural TR beta mutants associated with the syndrome of generalized resistance to thyroid hormone (GRTH). These receptor mutants are characterized by a variably decreased affinity for T3. We show here that their homodimer binding characteristics are altered. For example, kindred GH binds as a homodimer more weakly to DNA than wild-type (WT), whereas mutant PV forms clearly stronger homodimer complexes than WT even in the presence of TREs that bind WT receptor homodimers poorly. Although other mutants were able to bind IP-6 elements efficiently as homodimers, these homodimers showed a decreased sensitivity to T3 in accordance with their reduced affinities for the ligand. In vivo, six of the eight mutants were able to function as strong repressors on IP sites located 3' of the TATA box. Although T3 released repression by WT TR beta, the hormone did not release repression by some of the mutant receptors, and elevated concentrations of T3 were required to release repression by other mutants. Importantly, most of the GRTH-associated mutants were able to function as potent dominant negative repressors of WT in the homodimer pathway, whereas they showed little dominant negative activity in the heterodimer-dependent transcriptional activation pathway. Only one of the eight GRTH mutants, a deletion of the carboxy-terminus, was found to have a strong dominant negative activity on both T3 response pathways. Our data suggest a dominant negative mechanism of action for GRTH mutants that is consistent with their homodimer binding characteristics to IP-TREs and correlates well with T3 resistance in patients.