CD44 is an adhesion molecule in the extracellular matrix that shows various functions, including tumor genesis and metastasis. A recent study showed that CD44 expression level was strongly correlated with the generation of papillary thyroid carcinomas, the most prevalent malignancy of the thyroid gland. We report here that CD44 is negatively regulated by thyroid hormone (T3) through a novel mechanism. We demonstrate that nuclear receptor corepressor (NCoR) enhances thyroid hormone receptor (TR)-mediated basal transactivation by a weak TR·DNA interaction in the absence of T3, which is repressed byT3 through a transient TR·DNA interaction. Initially, we identified that CD44 was negatively directly transcriptionally T3-responsive. Deletion and mutation analysis indicated that both a weak TR and a GAGA-binding factor (GAF) binding sites on the CD44 promoter were required for negative regulation by T3. The weak TR·DNA interaction was further confirmed by electrephoretic gel mobility shift assay, chromatin immunoprecipitation, and transfection assays using a non-DNA-binding TRα1 mutant. More interestingly, NCoR acted as a co-activator to enhance TR-mediated basal transactivation in the absence of T3. This effect was eliminated by removal of TR or NCoR binding. Most strikingly, T3-induced a remarkable increase in TR·DNA binding at 40–60 min after T3 exposure that rapidly returned to basal levels, suggesting a T3-induced remodeling of chromatin structure at the early stage of T3 stimulation resulting in repression. Therefore, we propose a mechanism by which NCoR, GAF, and TR interact with the CD44 negative T3-responsive element to enhance basal transactivation, whereas T3 induces the remodeling of chromatin structure for repression. [ABSTRACT FROM AUTHOR]