Thyroid hormone action is not only determined by hormone availability, but also by target organ sensitivity. A dominant negative interaction is known to occur between thyroid hormone receptors (TRs) and the non-ligand binding splicing variant c-erbA alpha 2 as well as mutant TR beta 1 from kindreds with resistance to thyroid hormone. We compared the inhibitory effect of naturally occurring mutant hTR beta 1, artificially created hTR alpha 1 mutants, c-erbA alpha 2 and the human peroxisome proliferator-activated receptor (hPPAR) on three prototypic T3-response elements (TREs), TRE-PAL, DR + 4 and TRE-LAP. The inhibitory effect of mutant hTR alpha 1 and beta 1 occurred only on TRE-LAP and to a minor degree on DR + 4 when equimolar ratios of mutant/wildtype receptor were present. In contrast, the c-erbA alpha 2 splicing variant and the hPPAR inhibited TR action on all three TREs. Gel mobility shift experiments in the presence of T3 showed increased binding of mutant hTR alpha 1 and beta 1 only to TRE-LAP compared to the binding of wildtype hTRs, thereby explaining their TRE-selective dominant negative potency. Contrarily, equal amounts of c-erbA alpha 2 or hPPAR protein did not bind to either of the three response elements even in the presence of RXR. Since the TR:RXR heterodimers were only partially displaced from DNA in the presence of excess amounts of c-erbA alpha 2, it is likely that the TRE-unspecific dominant negative action of c-erbA alpha 2 is due in part to competition for DNA-binding and for TR-auxiliary proteins. In contrast, equimolar amounts of hPPAR completely inhibited the DNA-binding of hTR beta 1:RXR heterodimers, but not of TR:TR homodimers, suggesting that hPPAR has a higher RXR-binding affinity and is therefore a potent competitor for intranuclear RXR. Since thyroid hormones and peroxisome proliferators regulate in part a similar subset of target genes involved in fatty acid metabolism, these results suggest the possibility of cross-talk among the thyroid hormone and peroxisome proliferator signalling pathways. In summary, the results suggest that thyroid hormone action can be modulated by at least three different mechanisms: (i) increased binding of mutant hTRs to specific TREs; (ii) efficient competition for limiting amounts of RXR through the preferential formation of hPPAR:RXR, rather than TR:RXR heterodimers; and (iii) competition for binding to DNA and to auxiliary proteins other than RXR in the case of c-erbA alpha 2.