The orphan nuclear receptor TR2 and its truncated isoform deleted in the ligand binding domain (LBD) were localized exclusively in the nuclei as revealed by two methods of detection. An anti-hemagglutinin (HA) antibody detected specific nuclear localization of HA-tagged receptors and the green fluorescent protein (GFP)-tagged receptors were found to be distributed in the nuclei of living cells. By deletion analyses, the sequence responsible for targeting this receptor into the nucleus was defined. A stretch of 20 amino acid residues (KDCVINKHHRN RCQYCRLQR) within the second zinc-finger of this receptor is required for its nuclear localization and this signal is constitutively active. No nuclear localization signal was found in the N- terminus or the LBD. The GFP-tagged receptor remained biologically active, as evidenced by its repressive activity on the reporter that carried a binding site for this receptor, a direct repeat-5 (DR5). An electrophoretic mobility shift assay was performed to characterize the binding property of TR2 and its truncated isoform. TK2 bound to the DR5 as dimers whereas its truncated isoform bound as monomers.