The Tr2 orphan nuclear receptor can be SUMOylated, resulting in the replacement of coregulators recruited to the regulatory region of its endogenous target gene, Oct4. UnSUMOylated Tr2 activates Oct4, enhancing embryonal carcinoma-cell proliferation, and is localized to the promyelocytic leukemia (Pml) nuclear bodies. When its abundance is elevated, Tr2 is SUMOylated at Lys238 and seems to be released from the nuclear bodies to act as a repressor. SUMOylation of Tr2 induces an exchange of its coregulators: corepressor Rip140 replaces coactivator Pcaf, which switches Tr2 from an activator to a repressor. This involves dynamic partitioning of Tr2 into Pml-containing and Pml-free pools. These results support a model where SUMOylation-dependent partitioning and differential coregulator recruitment contribute to the maintenance of a homeostatic supply of activating, as opposed to repressive, Tr2, thus fine-tuning Oct4 expression and regulating stem-cell proliferation.