The thyroid hormone receptor (TR) D-domain links the ligand-binding domain (LBD, EF-domain) to the DNA-binding domain (DBD, C-domain), but its structure, and even its existence as a functional unit, are controversial. The D domain is poorly conserved throughout the nuclear receptor family and was originally proposed to comprise an unfolded hinge that facilitates rotation between the LBD and the DBD. Previous TR LBD structures, however, have indicated that the true unstructured region is three to six amino acid residues long and that the D-domain N terminus folds into a short amphipathic alpha-helix (H0) contiguous with the DBD and that the C terminus of the D-domain comprises H1 and H2 of the LBD. Here, we solve structures of TR-LBDs in different crystal forms and show that the N terminus of the TRalpha D-domain can adopt two structures; it can either fold into an amphipathic helix that resembles TRbeta H0 or form an unstructured loop. H0 formation requires contacts with the AF-2 coactivator-binding groove of the neighboring TR LBD, which binds H0 sequences that resemble coactivator LXXLL motifs. Structural analysis of a liganded TR LBD with small angle X-ray scattering (SAXS) suggests that AF-2/H0 interactions mediate dimerization of this protein in solution. We propose that the TR D-domain has the potential to form functionally important extensions of the DBD and LBD or unfold to permit TRs to adapt to different DNA response elements. We also show that mutations of the D domain LXXLL-like motif indeed selectively inhibit TR interactions with an inverted palindromic response element (F2) in vitro and TR activity at this response element in cell-based transfection experiments.