On positive thyroid hormone response elements (pTREs), thyroid hormone receptor (TR) binding to DNA in the absence of ligand (thyroid hormone, T3) decreases transcription (silencing). Silencing is due to a family of recently described nuclear corepressor proteins (NCoR and SMRT) which bind to the CoR box in the hinge region of TR. Ligand-dependent activation of TR is associated with displacement of corepressors and recruitment of coactivating proteins. Resistance to thyroid hormone (RTH) is due to mutations in the beta isoform of the thyroid hormone receptor (TR-beta). To date, three RTH mutations reportedly with near-normal T3 binding (A234T, R243Q, and R243W) have been described in or near the CoR box. To determine the mechanism of RTH caused by these mutants, the interaction of wild type (wt) and mutant TRs with the corepressor, NCoR, and the coactivator, SRC-1, was tested in gel-shift assays. As expected, NCoR bound wt TR in the absence of T3 and dissociated from TR with increasing T3 concentration. SRC-1 failed to bind wt TR in the absence of T3, but bound to TR with increasing avidity as T3 concentrations rose. At no T3 concentration did both NCoR and SRC-1 bind to wt TR, indicating that their binding to TR was mutually exclusive. Hinge mutants bound NCoR normally in the absence of T3; however, dissociation of NCoR and recruitment of SRC-1 was markedly impaired except at very high T3 concentrations. Importantly, hinge mutant TRs when complexed to DNA bound T3 poorly despite their near-normal T3 binding in solution. These binding studies correlated with functional assays showing defective transactivation of pTREs by hinge mutants except at high T3 concentrations. Thus, we describe a novel mechanism of RTH whereby TR hinge mutants selectively affect T3 binding when complexed to DNA, and prevent NCoR dissociation from TR. Our data also suggest that solution T3 binding by RTH mutants may not accurately reflect physiologically relevant T3 binding by TR when bound to DNA.