The ability of nuclear receptors (NRs) to activate transcription of target genes requires the binding of cognate ligands to their ligand-binding domains (LBDs). Information provided by the three-dimensional structures of the unliganded RXR alpha and the liganded RAR gamma LBDs has been incorporated into a general alignment of the LBDs of all NRs. A twenty amino-acid region constitutes a NR-specific signature and contains most of the conserved residues that stabilize the core of the canonical fold of NR LBDs. A common ligand-binding pocket, involving predominantly hydrophobic residues, is inferred by homology modelling of the human RXR alpha and glucocorticoid receptor ligand-binding sites according to the RAR gamma holo-LBD structure. Mutant studies support these models, as well as a general mechanism for ligand-induced activation deduced from the comparison of the transcriptionally active RAR gamma holo- and inactive RXR alpha apo-LBD structures.