Nuclear receptors are ligand-modulated transcription factors. On the basis of the completed human genome sequence, this family was thought to contain 48 functional members. However, by mining human and mouse genomic sequences, we identified FXRbeta as a novel family member. It is a functional receptor in mice, rats, rabbits, and dogs but constitutes a pseudogene in humans and primates. Murine FXRbeta is widely coexpressed with FXR in embryonic and adult tissues. It heterodimerizes with RXRalpha and stimulates transcription through specific DNA response elements upon addition of 9-cis-retinoic acid. Finally, we identified lanosterol as a candidate endogenous ligand that induces coactivator recruitment and transcriptional activation by mFXRbeta. Lanosterol is an intermediate of cholesterol biosynthesis, which suggests a direct role in the control of cholesterol biosynthesis in nonprimates. The identification of FXRbeta as a novel functional receptor in nonprimate animals sheds new light on the species differences in cholesterol metabolism and has strong implications for the interpretation of genetic and pharmacological studies of FXR-directed physiologies and drug discovery programs.