Nuclear receptors are central to the regulation of development, endocrine signalling and metabolism. The transcriptional activity of many receptors is controlled through the binding of small, fat-soluble molecules to the ligand-binding domain. In most cases, ligand binding turns the receptors into potent activators of transcription. This switch involves the exchange of co-regulator proteins that mediate transcriptional regulation. Structural and biochemical studies have together revealed the mechanism of action of this ligand-induced molecular switch, in which changes in the dynamic behaviour of the receptor play a key role. This remarkable dynamic mechanism has facilitated the evolution of a family of nuclear receptors with highly diverse ligand recognition and signalling properties.