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 LXRalpha and RXRbeta 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.