We describe here a novel homeobox gene, denoted TGIF (5"TG3' interacting factor), which belongs to an expanding TALE (three amino acid loop extension) superclass of atypical homeodomains. The TGIF homeodomain binds to a previously characterized retinoid X receptor (RXR) responsive element from the cellular retinol-binding protein II promoter (CRBPII-RXRE), which contains an unusual DNA target for a homeobox. The interactions of both the homeprotein TGIF and receptor RXR alpha with the CREBPII-RXRE DNA motif occur on overlapping areas and generate a mutually exclusive binding in vitro. Transient cellular transfections demonstrate that TGIF inhibits the 9-cis-retinoic acid-dependent RXR alpha transcription activation of the retinoic acid responsive element. TGIF transcripts were detected in a restricted number of tissues. The canonical binding site of TGIF is conserved and is an integral part of several responsive elements which are organized like the CRBPII-RXRE. Hence, a novel auxiliary factor to the steroid receptor superfamily may participate in the transmission of nuclear signals during development and in the adult, as illustrated by the down-modulation of the RXR alpha activities.