The thyroid hormone receptor (TR) has been proposed to regulate expression of target genes in the absence of triiodothyronine (T₃) through the recruitment of the corepressors, NCoR and SMRT. Thus, NCoR and SMRT may play an essential role in thyroid hormone action, although this has never been tested in vivo. To accomplish this, we developed mice that express in the liver a mutant NCoR protein (L-NCoRΔID) that cannot interact with the TR. L-NCoRΔID mice appear grossly normal, however, when made hypothyroid the repression of many positively regulated T₃-target genes is abrogated, demonstrating that NCoR plays a specific and sufficient role in repression by TR in the absence of T₃. Remarkably, in the euthyroid state, expression of many T₃-targets is also up-regulated in L-NCoRΔID mice, demonstrating that NCoR also determines the magnitude of the response to T₃ in euthyroid animals. Although positive T₃ targets were up-regulated in L-NCoRΔID mice in the hypo- and euthyroid state, there was little effect seen on negatively regulated T₃ target genes. Thus, NCoR is a specific regulator of T₃-action in vivo and mediates repression by the unliganded TR in hypothyroidism. Furthermore, NCoR appears to play a key role in determining the tissue-specific responses to similar levels of circulating T₃. Interestingly, NCoR recruitment to LXR is also impaired in this model, leading to activation of LXR-target genes, further demonstrating that NCoR recruitment regulates multiple nuclear receptor signaling pathways.