Heterodimers of retinoid X receptor (RXR) and retinoic acid receptor (RAR) bind preferentially to directly repeated elements with spacing of two (DR2) or five (DR5) base pairs, due to the specific heterocooperative interaction of their DNA binding domains (DBDs) on these elements. We have demonstrated in the accompanying paper that the heterodimeric DBD interface that is responsible for the cooperative binding to DR5 elements, specifically involves the D-box of the RXR CII finger and the tip of the RAR CI finger. We show here that a second type of dimerization interface, which specifically implicates the RAR T-box and the RXR CII finger to the exclusion of the D-box, determines the selective binding to DR2 elements. Interestingly, the same type of dimerization interface (RXR T-box and CII finger) is responsible for the cooperative binding of homodimers of the RXR DBD to DR1 elements. Based on the three-dimensional structure of the glucocorticoid receptor DBD, modeling of RXR/RAR, RXR/TR and RXR/RXR DBD cooperative interactions predicts that in all cases the DBD contributing the CII finger, i.e. that of RXR, has to be positioned 5' to its cooperatively bound partner. This binding polarity of the DBDs is conferred upon the full-length receptors, since crosslinking experiments indicate that RXR is always 5' to RAR in complexes between either DR5 or DR2 and RXR/RAR heterodimers. The possible significance of these observations for transactivation by retinoic acid receptors is discussed.