Generalized resistance to thyroid hormone (GRTH) is caused by multiple distinct mutations that cluster in two regions of the hormone-binding domain of the thyroid hormone beta-receptor. The mutant receptors are functionally inactive, but nevertheless inhibit normal receptor activity in a dominant negative manner. Four different GRTH mutants were studied in the transient expression assays to further examine their functional properties. The transcriptional activity of the mutant receptors correlated with their T3 binding affinities. Two distal region mutants with partial T3 binding were transcriptionally active at high T3 concentrations, but exhibited potent dominant negative activity at low T3 concentrations. Two proximal region mutants that did not bind to T3 were 5- to 10-fold less effective inhibitors of normal receptor function, indicating that dominant negative inhibition is not correlated with T3 binding activity. Each of the proximal and distal region mutants retain the ability to form heterodimers with accessory proteins and to bind to DNA effectively. Because the non-T3 binding thyroid hormone receptor isoform alpha 2 also exists in most tissues, its effects on mutant receptor function were also examined. The inhibitory activity of each of the GRTH mutants was potentiated by alpha 2 but only in the context of a positively regulated reporter gene. Thus, alpha 2 may selectively alter the degree of dominant negative activity that occurs for different target genes. We conclude that the locations of GRTH mutations may influence dominant negative activity by altering transactivating or other functions of the receptor, providing a potential basis for the phenotypic variability in different kindreds with GRTH.