The thyroid hormone receptor (TR) has been proposed to regulate expression of target genes in the absence of triiodothyronine (T(3)) through the recruitment of the corepressors, NCoR and SMRT. Thus, NCoR and SMRT may play an essential role in thyroid hormone action, although this has never been tested in vivo. To accomplish this, we developed mice that express in the liver a mutant NCoR protein (L-NCoRDeltaID) that cannot interact with the TR. L-NCoRDeltaID mice appear grossly normal, however, when made hypothyroid the repression of many positively regulated T(3)-target genes is abrogated, demonstrating that NCoR plays a specific and sufficient role in repression by TR in the absence of T(3). Remarkably, in the euthyroid state, expression of many T(3)-targets is also up-regulated in L-NCoRDeltaID mice, demonstrating that NCoR also determines the magnitude of the response to T(3) in euthyroid animals. Although positive T(3) targets were up-regulated in L-NCoRDeltaID mice in the hypo- and euthyroid state, there was little effect seen on negatively regulated T(3) target genes. Thus, NCoR is a specific regulator of T(3)-action in vivo and mediates repression by the unliganded TR in hypothyroidism. Furthermore, NCoR appears to play a key role in determining the tissue-specific responses to similar levels of circulating T(3). Interestingly, NCoR recruitment to LXR is also impaired in this model, leading to activation of LXR-target genes, further demonstrating that NCoR recruitment regulates multiple nuclear receptor signaling pathways.