The nuclear receptor heterodimers of liver X receptor (LXR) and retinoid X receptor (RXR) are key transcriptional regulators of genes involved in lipid homeostasis and inflammation. We report the crystal structure of the ligand‐binding domains (LBDs) of LXRα and RXRβ complexed to the synthetic LXR agonist T‐0901317 and the RXR agonist methoprene acid (Protein Data Base entry 1UHL). Both LBDs are in agonist conformation with GRIP‐1 peptides bound at the coactivator binding sites. T‐0901317 occupies the center of the LXR ligand‐binding pocket and its hydroxyl head group interacts with H421 and W443, residues identified by mutational analysis as critical for ligand‐induced transcriptional activation by T‐0901317 and various endogenous oxysterols. The topography of the pocket suggests a common anchoring of these oxysterols via their 22‐, 24‐or 27‐hydroxyl group to H421 and W443. Polyunsaturated fatty acids act as LXR antagonists and an E267A mutation was found to enhance their transcriptional inhibition. The present structure provides a powerful tool for the design of novel modulators that can be used to characterize further the physiological functions of the LXR–RXR heterodimer.