In a search for novel transcriptional intermediary factors for the estrogen receptor (ER), we used the ligand-binding domain and hinge region of ER as bait in a yeast two-hybrid screen of a cDNA library derived from tamoxifen-resistant MCF-7 human breast tumors from an in vivo athymic nude mouse model. Here we report the isolation and characterization of the forkhead homologue in rhabdomyosarcoma (FKHR), a recently described member of the hepatocyte nuclear factor 3/forkhead homeotic gene family, as a nuclear hormone receptor (NR) intermediary protein. FKHR interacts with both steroid and nonsteroid NRs, although the effect of ligand on this interaction varies by receptor type. The interaction of FKHR with ER is enhanced by estrogen, whereas its interaction with thyroid hormone receptor and retinoic acid receptor is ligand-independent. In addition, FKHR differentially regulates the transactivation mediated by different NRs. Transient transfection of FKHR into mammalian cells dramatically represses transcription mediated by the ER, glucocorticoid receptor, and progesterone receptor. In contrast, FKHR stimulates rather than represses retinoic acid receptor- and thyroid hormone receptor-mediated transactivation. Most intriguingly, overexpression of FKHR dramatically inhibits the proliferation of ER-dependent MCF-7 breast cancer cells. Therefore, FKHR represents a bifunctional NR intermediary protein that can act as either a coactivator or corepressor, depending on the receptor type.