We have recently described the properties of direct repeats (DRs) of the half-site AGGTCA as hormone response elements (HREs). According to our results, spacing the half sites by 3, 4, or 5 nucleotides determines specificity of response for vitamin D3, thyroid hormone, and retinoic acid receptors, respectively. This so-called 3-4-5 rule led to the prediction that remaining spacing options of 0, 1, and 2 might serve as targets for other nuclear receptors. A concurrent prediction is that receptors recognizing common sites might display more complex or combinatorial interactions. In exploring these predictions, we discovered that both the retinoid X receptor (RXR) and COUP-TF bind preferentially to a DR-1 motif. In vivo, RXR and COUP-TF display antagonistic action such that RXR-mediated activation is fully repressed by COUP-TF. In vitro studies reveal that COUP-TF and RXR form heterodimers on DR-1. Thus, these results support a general proposal in which the half-site spacing preferences may be used as a means to decipher potentially complex and interactive regulatory circuits.