Juvenile hormone (JH) is a sesquiterpenoid of vital importance for insect development, yet the molecular basis of JH signaling remains obscure, mainly because a bona fide JH receptor has not been identified. Mounting evidence points to the basic helix-loop-helix (bHLH)/Per-Arnt-Sim (PAS) domain protein Methoprene-tolerant (Met) as the best JH receptor candidate. However, details of how Met transduces the hormonal signal are missing. Here, we demonstrate that Met specifically binds JH III and its biologically active mimics, methoprene and pyriproxyfen, through its C-terminal PAS domain. Substitution of individual amino acids, predicted to form a ligand-binding pocket, with residues possessing bulkier side chains reduces JH III binding likely because of steric hindrance. Although a mutation that abolishes JH III binding does not affect a Met-Met complex that forms in the absence of methoprene, it prevents both the ligand-dependent dissociation of the Met-Met dimer and the ligand-dependent interaction of Met with its partner bHLH-PAS protein Taiman. These results show that Met can sense the JH signal through direct, specific binding, thus establishing a unique class of intracellular hormone receptors.