Nuclear receptors are transcription factors that activate gene expression in response to ligands. The C-terminal helix (helix 12) of the ligand-binding domain plays a critical role in the activation mechanism. When bound to activating ligands, helix 12 adopts a conformation that promotes the binding of co-activator proteins. Helix 12 also adopts this 'active' position in several ligand-free structures, raising questions as to the exact role of helix 12. We proposed that the dynamic properties of helix 12 may be critical for the activation mechanism and, to test this, have used fluorescence anisotropy techniques to directly monitor the mobility of helix 12 in PPARgamma. Our results suggest that helix 12 is significantly more mobile than the main body of the protein. Upon ligand binding, helix 12 shows reduced mobility, accounting for its role as a molecular switch. We also show that natural mutations in human PPARgamma, associated with severe insulin resistance and diabetes mellitus, exhibit perturbations in the dynamic behavior of helix 12. Our findings provide the first direct observations of the mobility of helix 12 and suggest that the dynamic properties of this helix are key to the regulation of transcriptional activity.