The 2.0-A crystal structure of the ligand-binding domain (LBD) of the human retinoic acid receptor (RAR)-gamma bound to all-trans retinoic acid reveals the ligand-binding interactions and suggests an electrostatic guidance mechanism. The overall fold is similar to that of the human RXR-alpha apo-LBD, except for the carboxy-terminal part which folds back towards the LBD core, contributing to the hydrophobic ligand pocket and 'sealing' its entry site. We propose a 'mouse trap' mechanism whereby a ligand-induced conformational transition repositions the amphipathic alpha-helix of the AF-2 activating domain and forms a transcriptionally active receptor.