The thyroid hormone receptor (TR) regulates the expression of target genes upon binding to triiodothyro nine (T-3) response elements, In the presence of T-3, the TR recruits coactivating proteins that both modulate and integrate the ligand response, We report here the cloning of a novel protein using the TR ligand-binding domain as bait in the yeast two-hybrid system. Analysis of a putative full length clone demonstrates a cDNA sequence that encodes a protein of 920 amino acids with a size of 120 kDa (p120), Alignment with known sequences shows homology to a previously identified protein of unknown function, termed skeletal muscle abundant protein, Interaction studies demonstrate that p120 interacts with the TR AF-2 domain in the presence of ligand through a 111-amino acid region. Northern analysis demonstrates widespread expression in human tissues. Cotransfection assays in CV-1 cells demonstrate that p120 enhances TR-mediated transactivation on multiple T-3 response elements in the presence of T-3. In addition, CREB-binding protein synergizes with p120 to enhance this effect. When linked to the GAL4 DNA-bind ing domain, p120 is an activator of transcription alone. Thus, p120 satisfies a number of important criteria as a nuclear receptor coactivator.