Ligand-dependent interactions between nuclear receptors and members of a family of nuclear receptor coactivators are associated with transcriptional activation. Here we used fluorescence resonance energy transfer (FRET) as an approach for detecting and quantitating such interactions. Using the ligand binding domain (LBD) of peroxisome proliferator-activated receptor (PPAR gamma) as a model, known agonists (thiazolidinediones and Delta 12, 14-PGJ2) induced a specific interaction resulting in FRET between the fluorescently labeled LBD and fluorescently labeled coactivators [CREB-binding protein (CBP) or steroid receptor coactivator-1 (SRC-1)]. Specific energy transfer was dose dependent; individual ligands displayed distinct potency and maximal FRET profiles that were identical when results obtained using CBP vs. SRC-1 were compared. In addition, half-maximally effective agonist concentrations (EC(50)s) correlated well with reported results using cell-based assays. A site-directed AF2 mutant of PPAR gamma (E471A) that abrogated ligand-stimulated transcription in transfected cells also failed to induce ligand-mediated FRET between PPAR gamma LBD and CBP or SRC-1. Using estrogen receptor (ER alpha) as an alternative system, known agonists induced an interaction between ER alpha LBD and SRC-1, whereas ER antagonists disrupted agonist-induced interaction of ER alpha with SRC-1. In the presence of saturating agonist concentrations, unlabeled CBP or SRC-1 was used to compete with fluorescently labeled coactivators with saturation kinetics. Relative affinities for the individual receptor-coactivator pairs were determined as follows: PPAR gamma-CBP = ER alpha-SRC-1 > PPAR gamma-SRC-1 much greater than ER alpha-CBP. Conclusions: 1) FRET-based coactivator association is a novel approach for characterizing nuclear receptor agonists or antagonists; individual ligands display potencies that are predictive of in vivo effects and distinct profiles of maximal activity that are suggestive of alternative receptor conformations. 2) PPAR gamma interacts with both CBP and SRC-1; transcriptional activation and coactivator association are AF2 dependent. 3) Nuclear receptor LBDs have distinct affinities for individual coactivators; thus, PPAR gamma has a greater apparent affinity for CBP than for SRC-1, whereas ER alpha interacts preferentially with SRC-1 but very weakly with CBP.