In the presence of its ligand, thyroid hormone receptor (T3R) binds specifically to DNA sequences near a number of genes and induces their expression. We show that in the absence of the hormone, a T3R binding site acts in cis to decrease expression from such genes. The endogenous T3 receptors in rat pituitary cell lines are sufficient to mediate this effect, as shown by comparisons of basal levels of expression directed by transiently transfected plasmids containing the rat growth hormone promoter with wild-type or point-mutated T3 response elements (T3RE). The magnitude of the negative effect is increased by increasing the strength of the T3RE or by raising intracellular levels of T3R by appropriate transfections. T3REs exert a similar negative effect on the herpes virus thymidine kinase (TK) promoter; this effect is dependent on expression of functional T3 aporeceptor (apoT3R). Analysis of a set of T3REs of increasing strength inserted upstream of the TK promoter showed a strong correlation between the level of induced expression in the presence of hormone and the level of repressed expression in the absence of hormone. These results show that, unlike other members of the nuclear hormone receptor family, T3R binds to specific DNA sequences in the absence of hormone and exerts a negative effect on expression of linked genes. The apparent affinity of apoT3R and hormone-bound T3R for a T3RE was assessed by using varying amounts of T3R expression vector in a transfection dose response assay.(ABSTRACT TRUNCATED AT 250 WORDS)