Nuclear receptors can function as ligand-inducible transregulators in both mammalian and yeast cells, indicating that important features of control of transcription have been conserved throughout evolution. Here, we report the isolation and characterization of a yeast protein that exhibits properties expected for a coactivator/mediator of the ligand-dependent activation function AF-2 present in the ligand-binding domain (LBD, region E) of the retinoid X (RXRalpha) and estrogen (ERalpha) receptors. This protein is identical to Ada3, a component of the yeast Ada coactivator complex. We demonstrate that: (1) the region encompassing residues 347-702 of Ada3 interacts with the LBD of RXRalpha and ERalpha in a ligand-dependent manner in yeast; (2) this interaction corresponds to a direct binding and requires the integrity of the core of the AF-2 activating domain (AF-2 AD) of both RXRalpha and ERalpha; (3) Ada3 as well as Ada2 and Gcn5, two other components of the Ada complex, are required for maximal AF-2 activity in yeast; and (4) Ada3 is able to enhance the AF-2 activity of RXRalpha and ERalpha when overexpressed in yeast and mammalian cells. Taken together, these data indicate that ligand-dependent transactivation by RXRalpha and ERalpha in yeast is mediated at least in part by the Ada complex, in which the Ada3 subunit directly binds to the holoreceptor LBD.