In a patient with severe resistance to thyroid hormone (RTH), we found a novel mutation (leucine to serine in codon 454, L454S) of the thyroid hormone receptor β. This mutation is in the ligand-dependent transactivation domain that has been shown to interact with transcriptional coactivators (CoAs). The mutant protein binds T₃, but its ability to activate transcription of a positively regulated gene (TRE-tk-Luc), and to repress a negatively regulated gene (TSHα-Luc), is markedly impaired. As anticipated from its location, the L454S mutant interacts weakly with CoAs, such as SRC1 and glucocorticoid receptor interacting protein 1 (GRIP1) in gel mobility shift assays and in mammalian two-hybrid assays, even in the presence of the maximal dose of T₃. In contrast, in the absence of T₃, the L454S mutant interacts much more strongly with nuclear receptor corepressor (NCoR) than does the wild-type receptor, and the T₃-dependent release of NCoR is markedly impaired. By comparison, the NCoR interaction and T₃-dependent dissociation of an adjacent AF-2 domain mutant (E457A) are normal. These findings reveal that the Leu 454 is involved directly, or indirectly, in the release of corepressors (CoRs) as well as in the recruitment of CoAs. The strong interaction with NCoR at a physiological concentration of T₃ results in constitutive activation of the TSH genes as well as constitutive silencing of positively regulated genes. When the dominant negative effect was examined among various mutants, it correlated surprisingly well with the potency of NCoR binding but not with the degree of impairment in CoA binding. These findings suggest that the defective release of NCoRs, along with retained dimerization and DNA binding, are critical features for the inhibitory action of mutant thyroid hormone receptors. These studies also suggest that helix 12 of the thyroid hormone receptor acts as a dual functional domain. After the binding of T₃, its conformation changes, causing the disruption of CoR binding and the recruitment of CoAs.