Transcriptional repression by nuclear hormone receptors is thought to result from a unison of targeting chromatin modification and disabling the basal transcriptional machinery. We used Xenopus oocytes to compare silencing effected by the thyroid hormone receptor (TR) and its mutated version, the oncoprotein v-ErbA, on partly and fully chromatinized TR-responsive templates in vivo. Repression by v-ErbA was not as efficient as that mediated by TR, was significantly more sensitive to histone deacetylase (HDAC) inhibitor treatment and, unlike TR, v-ErbA required mature chromatin to effect repression. We find that both v-ErbA and TR can recruit the corepressor N-CoR, but, in contrast to existing models, show a concomitant enrichment for HDAC3 that occurs without an association with Sin3, HDAC1/RPD3, Mi-2 or HDAC5. We propose a requirement for chromatin infrastructure in N-CoR/HDAC3-effected repression and suggest that the inability of v-ErbA to silence on partly chromatinized templates may stem from its impaired capacity to interfere with basal transcriptional machinery function. In support of this notion, we find v-ErbA to be less competent than TR for binding to TFIIB in vitro and in vivo.