The roles in DNA binding and transcriptional activation of individual amino acids in the putative recognition alpha-helix of the first zinc finger of the beta-isoform of the human thyroid hormone receptor (hT3R beta) have been probed by site-directed mutagenesis. Alanine substitutions of highly conserved residues involved in the folding of this zinc finger abolished the binding of hT3R beta to various thyroid response elements. A similar effect was observed for alanine substitutions of those conserved residues in hT3R beta that were expected to make specific contacts to DNA bases common to all hormone response elements. The three P-box amino acids have previously been shown to be essential for discrimination of the base pairs that differ between the DNA binding sites for related steroid/thyroid hormone receptors. In hT3R beta, the P-box residues are E, G, and G; the results of this study show that alanine substitution of the glutamic acid dramatically reduces DNA binding activity by hT3R beta, while the substitution of either glycine has little or no effect on DNA binding. The effects of alanine substitutions on hT3R beta transcriptional activation properties were consistent with the effect of these substitutions on DNA binding properties, with the exception of the second P-box amino acid. T3R beta substituted with alanine at this position is substantially more defective in transcriptional activation than it is in specific DNA binding. These results indicate that there are two separate mechanisms of response element discrimination by P-box amino acids of steroid/thyroid hormone receptors, one which operates at the level of DNA recognition and a second which operates at the level of transcriptional activation.