The thyroid hormone receptor-coding locus, c-erbA alpha, generates several mRNAs originating from a single primary transcript that undergoes alternative splicing. We have identified for the first time two new transcripts, called TRdelta alpha1 and TRdelta alpha2 [mRNA for isoform alpha1 and alpha2 of the T3 receptor (TR), respectively], whose transcription is initiated from an internal promoter located within intron 7 of the c-erbA alpha gene. These two new transcripts exhibit tissue-specific patterns of expression in the mouse. These two patterns are in sharp contrast with the expression patterns of the full-length transcripts generated from the c-erbA alpha locus. TR alpha1 and TRdelta alpha2 mRNAs encode N-terminally truncated isoforms of T3R alpha1 and T3R alpha2, respectively. The protein product of TRdelta alpha1 antagonizes the transcriptional activation elicited by T3 and retinoic acid. This protein inhibits the ligand-induced activating functions of T3R alpha1 and 9-cis-retinoic acid receptor-alpha but does not affect the retinoic acid-dependent activating function of retinoic acid receptor-alpha. We predict that these truncated proteins may work as down-regulators of transcriptional activity of nuclear hormone receptors in vivo.