TRANSCRIPTIONAL silencing mediated by nuclear receptors is important in development, differentiation and oncogenesis^1-3. The mechanism underlying this effect is unknown but is one key to understanding the molecular basis of hormone action. Here we identify a receptor-interacting factor, SMRT, as a silencing mediator (co-repressor) for retinoid and thyroid-hormone receptors. SMRT is a previously undiscovered protein whose association with receptors both in solution and bound to DNA-response elements is destabilized by ligand. The interaction with mutant receptors correlates with their transcriptional silencing activities. In vivo, SMRT functions as a potent co-repressor, and a GAL4 DNA-binding domain fusion of SMRT behaves as a frank represser of a GAL4-dependent reporter. Together, our results identify a new class of cofactors which may be important mediators of hormone action.