The human syndrome of resistance to thyroid hormone (RTH) is associated with dominant mutations in the thyroid hormone receptor beta(TR beta) gene that generate mutant receptors with impaired binding for T-3. Although the TR beta gene differentially expresses two N-terminal variant receptors, TR beta 1 and TR beta 2, functional analyses of RTH mutants have focused exclusively on TR beta 1. Since TR beta 2 is expressed in tissues that are malfunctional in RTH, the role of mutations in the context of TR beta 2 was examined. We compared the functional properties of corresponding RTH mutations in the common C-terminal domain of both TR beta 1 and TR beta 2. Wild type TR beta 1 and TR beta 2 bound similarly as homodimers and as heterodimers with retinoid X receptors to T-3-responsive elements consisting of a direct repeat with 4-base pair spacing or an everted repeat. Homodimers, but not monomers or heterodimers, Of both receptor subtypes were dissociated by the addition of T-3. However, TR beta 2 formed at least 10-fold more stable homodimers than TR beta 1 on a palindromic repeat element, indicating that the N termini of TR beta 1 and TR beta 2 differentially influence dimerization on DNA. The RTH-like mutants of both TR beta 1 and TR beta 2 were equally insensitive to T-3. They were defective in T, binding but still bound DNA like their wild type counterparts except that the T-3-dependent dissociation of homodimers from DNA was severely reduced. Wild type TR beta 1 and TR beta 2 mediated T-3-inducible transactivation in cotransfection assays; this, however, was abolished in both mutants. TR beta 1 mediated more sensitive T-3-dependent transcriptional suppression than TR beta 2 through the negative T-3 response region of the TSH beta gene. Again, the mutation abolished T-3-dependent suppression by both mutants. Furthermore, both mutants inhibited T-3 inducible transcriptional activation by different wild type TR alpha and beta variants. These results indicate that both mutants have the potential to contribute to the pathogenesis of RTH and suggest that a reassessment of previous models of RTH is required to take into account the inhibitory activity of both TR beta 2 and TR beta 1 mutants.