The receptors for thyroid hormone (T3R) and retinoic acid (RAR) are members of a nuclear receptor subfamily that are capable of recognizing similar DNA sequences. Native response elements for T3R and RAR consist of two or more putative half-site binding motifs organized as imperfect direct or inverted repeats separated by different sized nucleotide gaps. To clarify how T3R, RAR, and related factors recognize DNA response elements, we analyzed the interaction of purified receptors with a series of inverted and direct repeats of an idealized AGGTCA half-site separated by different sized nucleotide gaps. Our results indicate that RAR and T3R can bind to half-sites as monomers and, depending on the orientation and distance between half-sites, also bind as homodimers or T3R-RAR heterodimers. T3R also binds to certain DNA elements as a heterodimer with one or more nuclear factors from eucaryotic cells. Thus, the orientation and spacing of half-sites play a central role in determining which configuration of receptors and nuclear factors will interact with a specific DNA element. This along with the ability of these factors to participate in reversible protein-protein interactions serve to broaden and diversify the responses mediated by T3R, RAR, and related members of this nuclear receptor subfamily.