Many nuclear receptors are capable of recognizing similar DNA elements. The molecular event(s) underlying the functional specificities of these receptors (in regulating the expression of their native target genes) is a very important issue that remains poorly understood. Here we report the cloning and analysis of a novel nuclear receptor coactivator (designated NRIF3) that exhibits a distinct receptor specificity. Fluorescence microscopy shows that NRIF3 localizes to the cell nucleus. The yeast two-hybrid and/or in vitro binding assays indicated that NRIF3 specifically interacts with the thyroid hormone receptor (TR) and retinoid X receptor (RXR) in a ligand-dependent fashion but does not bind to the retinoic acid receptor, vitamin D receptor, progesterone receptor, glucocorticoid receptor, or estrogen receptor. Functional experiments showed that NRIF3 significantly potentiates TR- and RXR-mediated transactivation in vivo but has little effect on other examined nuclear receptors. Domain and mutagenesis analyses indicated that a novel C-terminal domain in NRIF3 plays an essential role in its specific interaction with liganded TR and RXR while the N-terminal LXXLL motif plays a minor role in allowing optimum interaction. Computer modeling and subsequent experimental analysis suggested that the C-terminal domain of NRIF3 directly mediates interaction with liganded receptors through an LXXIL (a variant of the canonical LXXLL) module while the other part of the NRIF3 protein may still play a role in conferring its receptor specificity. Identification of a coactivator with such a unique receptor specificity may provide new insight into the molecular mechanism(s) of receptor-mediated transcriptional activation as well as the functional specificities of nuclear receptors.