The oestrogen receptor stimulates transcription by means of at least two distinct transcriptional activation domains, TAF‐1 in the N‐terminal domain and TAF‐2 in the hormone binding domain. Here we show that TAF‐2 activity requires a region in the C‐terminus of the hormone binding domain between residues 538 and 552 in the mouse oestrogen receptor which is conserved among many nuclear hormone receptors. Point mutagenesis of conserved hydrophobic and charged residues significantly reduced ligand dependent transcriptional activation but had no effect on steroid or DNA binding. Mutation of the corresponding residues in the glucocorticoid receptor also abolished transcriptional activation. We therefore propose that the conserved region may be essential for ligand dependent transcriptional activation by other members of the nuclear receptor family.