Utilizing a strategy involving domain exchange between retinoic acid receptors alpha and beta (RAR alpha and RAR beta) and monitoring the transcriptional activity of the resulting chimeric receptors with receptor-selective retinoids, we identified a 70-aa region within the N-terminal portion of the RAR alpha and -beta domain E which is important for an RAR alpha- or RAR beta-specific response. Two amino acid residues within this region, serine-232 (S232) and threonine-239 (T239) in RAR alpha and the corresponding alanine-225 (A225) and isoleucine-232 (I232) in RAR beta, were found to be essential for this effect. In addition, binding studies using the chimeric receptors expressed in Escherichia coli showed that the N-terminal portion of domain E was also important for the characteristic binding profile of t-RA and various retinoids with RAR alpha or RAR beta. Structural predictions of the primary amino acid sequence in this region indicate the presence of an amphipathic helix-turn-helix structure with five hydrophobic amino acids that resemble a leucine zipper motif. The amino acid residues identified by domain swapping, S232 and T239 in RAR alpha and A225 and I232 in RAR beta, were found within the hydrophobic face of an alpha-helix in close proximity to this zipper motif, suggesting that the ligand may interact with the receptor in the region adjacent to a surface involved in protein-protein interactions. This finding may link ligand binding to other processes important for transcriptional activation.