Ecdysone in Drosophila has been a paradigm for steroid hormones since its ability to induce gene activity directly was demonstrated by its effects on moulting and polytene chromosome puffing. The ecdysone receptor (EcR) was recently confirmed as a member of the nuclear receptor superfamily by cloning and characterization in a Drosophila cell line. Here we show that EcR needs to heterodimerize with either the retinoid X receptor (RXR) or its Drosophila homologue, ultraspiracle (USP), for DNA binding and transactivation. These results place the ecdysone receptor in the heterodimerizing class of the nuclear receptor superfamily and demonstrate that the role of RXR/USP as a central and promiscuous partner in mediating the activity of these receptors is highly conserved. Whereas EcR-USP DNA-binding activity is unaffected by hormone, EcR-RXR DNA-binding activity is stimulated by either ecdysteroid or 9-cis-retinoic acid, demonstrating that hormone can play a role in heterodimer stabilization.