We recently described an erythroid epsilon-globin gene repressor activity, which we named DRED (direct repeat erythroid-definitive). We show that DRED binds with high affinity to DR1 sites in the human embryonic (epsilon-) and fetal (gamma-) globin gene promoters, but the adult beta-globin promoter has no DR1 element. DRED is a 540 kDa complex; sequence determination showed that it contains the nuclear orphan receptors TR2 and TR4. TR2 and TR4 form a heterodimer that binds to the epsilon and gamma promoter DR1 sites. One mutation in a DR1 site causes elevated gamma-globin transcription in human HPFH (hereditary persistence of fetal hemoglobin) syndrome, and we show that this mutation reduces TR2/TR4 binding in vitro. The two receptor mRNAs are expressed at all stages of murine and human erythropoiesis; their forced transgenic expression reduces endogenous embryonic epsilony-globin transcription. These data suggest that TR2/TR4 forms the core of a larger DRED complex that represses embryonic and fetal globin transcription in definitive erythroid cells, and therefore that inhibition of its activity might be an attractive intervention point for treating sickle cell anemia.