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T hyroid hormone action is mediated by thyroid hormone receptors (TRs), which are members of the nuclear hormone receptor superfamily. DNA-binding is presumed to be essential for all nuclear actions of thyroid hormone. To test this hypothesis in vivo, the DNA-binding domain of TR-β was mutated within its P-box (GS mutant) using gene targeting techniques. This mutation in vitro completely abolishes TR-β DNA-binding, while preserving ligand (T₃) and cofactor interactions with the receptor. Homozygous mutant (TR-β^GS/GS) mice displayed abnormal T₃ regulation of the hypothalamic-pituitary-thyroid axis and retina identical to abnormalities previously observed in TR-β KO (TR-β^–/–) mice. However, TR-β^GS/GS mutant mice maintained normal hearing at certain frequencies and did not display significant outer hair cell loss, in contrast to TR-β^–/– mice. DNA-binding, therefore, is essential for many functions of the TR, including retinal development and negative feedback regulation by thyroid hormone of the hypothalamic-pituitary-thyroid axis. Inner ear development, although not completely normal, can occur in the absence of TR DNA-binding, suggesting that an alternative and perhaps novel thyroid hormone-signaling pathway may mediate these effects.