The interaction between the orphan nuclear receptor FTZ-F1 (Fushi tarazu factor 1) and the segmentation gene protein FTZ is critical for specifying alternate parasegments in the Drosophila embryo. Here, we have determined the structure of the FTZ-F1 ligand-binding domain (LBD)·FTZ peptide complex using x-ray crystallography. Strikingly, the ligand-binding pocket of the FTZ-F1 LBD is completely occupied by helix 6 (H6) of the receptor, whereas the cofactor FTZ binds the co-activator cleft site of the FTZ-F1 LBD. Our findings suggest that H6 is essential for transcriptional activity of FTZ-F1; this is further supported by data from mutagenesis and activity assays. These data suggest that FTZ-F1 might belong to a novel class of ligand-independent nuclear receptors. Our findings are intriguing given that the highly homologous human steroidogenic factor-1 and liver receptor homolog-1 LBDs exhibit sizable ligand-binding pockets occupied by putative ligand molecules.