The induction of CYP2B gene expression by phenobarbital (PB) is mediated by the translocation of the constitutive androstane receptor (CAR) from the cytoplasm to the nucleus. The CAR/RXR heterodimer binds to two DR-4 sites in a complex phenobarbital responsive unit (PBRU) in the CYP2B gene. The short heterodimer partner (SHP), an orphan nuclear receptor that lacks a conventional DNA binding domain, was initially identified by its interaction with CAR. We have examined the role of SHP in CAR-mediated transactivation of the CYP2B gene. Coexpression of SHP inhibited the transactivation of the CYP2B gene by CAR in cultured hepatoma cells and the p160 coactivator GRIP1 reversed the inhibition. The interaction of CAR with SHP was confirmed by GST pulldown experiments. SHP did not block the binding of either CAR/RXR to the PBRU or binding of GRIP1 to the CAR/RXR complex in gel mobility shift assays, but slightly increased CAR/RXR binding and slightly altered the mobility of the CAR/RXR/GRIP1 complex, suggesting an interaction of SHP with these complexes. The presence of SHP in the complexes, however, could not be detected in an antibody supershift assay. Recombinant corepressors mSin3A, SMRT, and HDAC1, but not NCoR1, interacted with GST-SHP but each of these corepressors in liver nuclear extracts bound to GST-SHP. SMRT and NCoR1 inhibited CAR-mediated activation independent of SHP, but mSin3A and HDAC1 had little effect alone, and were additive with SHP. These studies demonstrate that SHP does not inhibit CAR-mediated trans-activation by interfering with DNA binding or by competition with GRIP1. Instead, SHP may either inhibit recruitment of other coactivators by GRIP1 or actively recruit corepressors directly to the CAR/RXR/PBRU complex.