Previously, we and others reported that the high mobility group proteins, HMGB-1/-2, enhance DNA binding in vitro and transactivation in situ by the steroid hormone subgroup of nuclear receptors but did not influence these functions of class II receptors. We show here that the DNA binding domain (DBD) is sufficient to account for the selective influence of HMGB-1/-2 on the steroid class of receptors. Furthermore, the use of chimeric DBDs reveals that this selectivity is dependent on the C-terminal extension (CTE), amino acid sequences adjacent to the zinc finger core DBD. HMGB-1/-2 interact directly with the DBDs of steroid but not class II receptors, and this interaction requires the CTE. This in vitro interaction correlates with a requirement of the CTE for maximal HMGB-1/-2 enhancement of DNA binding in vitro and transcriptional activation in cells. Finally, class II receptor DBDs have a much higher intrinsic affinity for DNA than steroid receptor DBDs, and this affinity difference is also dependent on the CTE. These results reveal the importance of the steroid receptor CTE for DNA binding affinity and functional response to HMGB-1/-2.Nuclear hormone receptors comprise a superfamily of transcription factors that regulates diverse metabolic processes by binding to response elements in the enhancer regions of specific genes. This superfamily consists of three receptor subclasses: 1) the steroid hormone receptors for progesterone (PR) 1 , estrogen (ER), glucocorticoids (GR), androgens (AR), and mineralocorticoids (MR); 2) class II receptors for thyroid hormone (TR), retinoids (RAR and RXR), vitamin D3 (VDR), prostaglandins (PPAR), oxysterols, and bile acids; and 3) orphan receptors for which no endogenous ligand has been identified (1-4). Each of the receptor subclasses is characterized by a unique mechanism of action with respect to dimerization and DNA sequence recognition. Steroid receptors form homodimers that optimally recognize hexameric DNA elements arranged as inverted repeats separated by three unspecified base pairs. PR, GR, AR, and MR bind to the core hexamer AGAACA, whereas ER recognizes AGGTCA (2). Class II receptors preferentially function as heterodimers with RXR and recognize the AGGTCA hexamer arranged as direct repeats. Variable spacing between the direct repeats determines the RXR heterodimer binding specificity. Class II receptors, particularly TR, can also recognize an inverted repeat as homodimers, or half-sites as monomers. Orphan receptors can bind to the AGGTCA hexamer arranged either as a direct repeat, palindrome, or half-site as heterodimers with RXR, homodimers, or monomers (1, 5-7).DNA-bound nuclear receptors activate transcription through assembly of a coactivator protein complex (8 -10). Some of these coactivators possess enzyme activities that are thought to facilitate access of general transcription factors to chromatin templates (11,12). Additionally, the coactivator complex may serve as a protein bridge to facilitate assembly of the basal transcription apparatus (13, 14). We...