RXR, a member of the superfamily of nuclear hormone receptors, regulates gene transcription in response to 9-cis-retinoic acid. We previously showed that, among nuclear receptors, RXR is unique in that it self-associates into homotetramers, and that these tetramers dissociate rapidly upon ligation. Here, we report that binding of RXR tetramers to DNA containing two RXR response elements results in a dramatic DNA-looping. RXR can thus juxtapose distant DNA sequences, enabling transcriptional regulation by far-upstream factors. We show that RXR functions as a DNA architectural factor and that, while this activity is regulated by 9-cis-retinoic acid, it is distinct from and independent of the receptor's intrinsic transcriptional activity. The data establish RXR as the first identified architectural factor whose activity is regulated by a small ligand, and demonstrate a novel mechanism of transcriptional regulation by retinoids.