The estrogen receptor-related receptor gamma (ERRgamma/ERR3/NR3B3) is a member of the nuclear receptor superfamily that activates transcription in the absence of ligand. However, the detailed mechanism of gene regulation by ERRgamma is not fully understood. In this study we have found that the orphan nuclear receptor ERRgamma activates the DAX-1 promoter, which, in turn, represses transactivation by ERRgamma. Serial deletions of mouse DAX-1 (mDAX-1) gene promoter have revealed that the region responding to ERRgamma is located between -129 and -121 bp and -334 and -326 bp. Gel shift assays and chromatin immunoprecipitation (ChIP) assays demonstrated that ERRgamma binds directly to the mDAX-1 promoter. Site-directed mutagenesis results demonstrated that ERRE1 (-129 to -121 bp) is more important than ERRE2 (-334 to -326 bp) which is not conserved in the human DAX-1 promoter. In addition, adenovirus-mediated overexpression of ERRgamma induced DAX-1 gene expression in MCF-7 breast cancer cells that co-expressed ERRgamma and DAX-1. Moreover, yeast two-hybrid and glutathione S-transferase (GST)-pull down assays demonstrated that DAX-1 physically interacted with ERRgamma and inhibited ERRgamma transactivation, and that this interaction was dependent on the AF-2 domain of ERRgamma. In addition, in vitro competition assays showed that DAX-1 inhibited PGC-1alpha mediated ERRgamma transactivation, via competition between these two factors for the AF-2 binding domain. We thus propose a novel autoregulatory loop that controls DAX-1 gene expression by ERRgamma.