Thyroid-hormone receptors (TRs) form heterodimers with retinoid-X receptors (RXRs) on thyroid-hormone-response elements (TREs). However, it is not known whether the formation of liganded TR/RXR heterodimer on a TRE alone is sufficient to dictate transcriptional activity. We designed several mutated DR4s (half-sites arranged as direct repeats with a nucleotide gap of 4) that bound TR/RXR heterodimers preferentially, and employed them to characterize functional and biochemical properties of the heterodimers on DNA. Although TR/RXR heterodimer binding was similar on some of the mutated DR4s, transient transfection assays showed that TRalpha failed to support triiodothyronine (T3)-stimulated transcription on "inactive" DR4s but mediated basal repression on both "active" and inactive mutated DR4. T3 binding assays showed that the mutated DR4s did not affect T3 binding to the heterodimer. Finally, partial proteolysis studies revealed that binding of active DR4 elements and T3 to the heterodimer synergistically enhanced heterodimerization-induced protease resistance of TR, but not RXR, in the heterodimer. These results suggest that: 1) liganded TR/RXR heterodimer binding to a DR4 is not sufficient for transcriptional activation of the target gene, and 2) DNA sequences in specific TREs may modify T3-mediated transcription by affecting the conformation of the liganded heterodimer.