Ligand activation of retinoic acid receptors (RARs) involves coordinated changes in their interaction with coregulatory molecules. Binding of the agonist all-trans-retinoic acid to the RAR results in increased interaction with coactivator molecules as well as a decreased interaction with corepressor molecules. Thus, an all-trans-retinoic acid antagonist might function either by preventing agonist induction of such events or, additionally, by actively increasing repression via corepressor recruitment. We demonstrate that the repression of the transcriptional activity of a constitutively active RARgamma-VP-16 chimeric receptor by the inverse agonist AGN193109 requires a functional Co-R box and that binding of this ligand to RARgamma leads to an increased interaction with the corepressor N-CoR both in glutathione S-transferase pull-down and yeast two-hybrid analyses. Detection of nuclear receptor corepressor (N-CoR) association with RARgamma was greatly facilitated by inclusion of a RARE oligonucleotide in coimmunoprecipitation analyses, a result of an increase in association of the ternary complex consisting of RAR, RXR, and DNA. Similarly, this DNA-dependent increase in heterodimer formation likewise resulted in an increase in agonist-mediated recruitment efficiency of the coactivator SRC-1. Under conditions which favor ternary complex formation, a RAR neutral antagonist is distinguished from an inverse agonist with respect to corepressor recruitment as is a RAR partial agonist distinguished from an agonist with respect to coactivator recruitment. These results indicate that it is possible to design RAR ligands with distinct recruitment capabilities for coregulators, both coactivators as well as corepressors. In addition, using this recruitment assay, we show that SRC-1 and the related coactivator molecule ACTR associate with the ternary complex via utilization of different helical motifs within their conserved receptor interaction domains.