The association of transcription corepressors SMRT and N-CoR with retinoid and thyroid receptors results in suppression of basal transcriptional activity. A key event in nuclear receptor signaling is the hormone-dependent release of corepressor and the recruitment of coactivator. Biochemical and structural studies have identified a universal motif in coactivator proteins that mediates association with receptor LBDs. We report here the identity of complementary acting signature motifs in SMRT and N-CoR that are sufficient for receptor binding and ligand-induced release. Interestingly, the motif contains a hydrophobic core (ΦxxΦΦ) similar to that found in NR coactivators. Surprisingly, mutations in the amino acids that directly participate in coactivator binding disrupt the corepressor association. These results indicate a direct mechanistic link between activation and repression via competition for a common or at least partially overlapping binding site.