Thyroid hormone (TH) action is mediated by the products of two genes, TH receptor (THR)α (THRA) and THRβ (THRB) that encode several closely related receptor isoforms with differing tissue distributions. The vast majority of THR isoform-specific effects are thought to be due to tissue-specific differences in THR isoform expression levels. We investigated the alternative hypothesis that intrinsic functional differences among THR isoforms mediate these tissue-specific effects. To achieve the same level of expression of each isoform, we created tagged THR isoforms and tested their DNA and functional properties in vitro. We found significant homodimerization and functional differences among the THR isoforms. THRA1 was unable to form homodimers on direct repeat separated by 4 bp DNA elements and was also defective in TH-dependent repression of Tshb and Rxrg in a thyrotroph cell line, TαT1.1. In contrast, THRB2 was both homodimer sufficient and fully functional on these negatively regulated genes. Using domain exchanges and individual amino acid switches between THRA1 and THRB2, we identified three amino acids in helix 10 of the THRB2 ligand-binding domain that are required for negative regulation and are absent in THRA1.