Transcriptional regulation of gene expression by nuclear receptors requires negatively and positively acting cofactors. Recent models for receptor activation propose that certain receptors in the absence of ligands can recruit corepressors while ligand binding results in conformational changes leading to the recruitment of coactivators. Previous work has established a coactivator role for the SRC-1 family members as well as an involvement of the coactivators CBP/p300 in nuclear receptor signaling. However, in addition to coactivators, ligand-activated nuclear receptors bind a number of different proteins that possibly serve other functions. Using peroxisome proliferator-activated receptor-α (PPARα) as bait in a yeast two-hybrid screening, we have isolated nuclear factor RIP140 whose function in receptor activation is unclear. We now report a detailed characterization of RIP140 action with a focus on the retinoid X receptor (RXR) heterodimeric receptors PPAR and thyroid hormone receptor (TR). We show that putative PPAR ligands enhance the interaction of RIP140 with the rat PPAR subtypes α and γ in solution but not with PPAR/RXR heterodimers on DNA. However, RIP140 forms ternary complexes in the presence of RXR ligands. Similar experiments with TR support the high affinity of RIP140 to the RXR subunit and also suggest that either partner in the TR/RXR heterodimer can independently respond to ligand. Coactivation experiments in yeast and mammalian cells confirm the coactivator role for SRC-1, but not for RIP140. We provide important evidence that the in vitro binding of RIP140 and SRC-1 to nuclear receptors is competitive. Since RIP140 generally down-regulates receptor activity in mammalian cells and specifically down-regulates coactivation mediated by SRC-1, we propose a model in which RIP140 indirectly regulates nuclear receptor AF-2 activity by competition for coactivators such as SRC-1.