The TRAP/Mediator complex serves as a coactivator for many transcriptional activators, including nuclear receptors such as the thyroid hormone receptor (TR) that targets the TRAP220 subunit. The critical but selective function of TRAP220 is evidenced by the embryonic lethal phenotype of Trap220(-)(/)(-) mice and by the observation that Trap220(-)(/)(-) fibroblasts (isolated before embryonic death) are impaired in specific nuclear receptor-dependent pathways. Here we have used a biochemical and genetic approach to understand the basis of specificity in TRAP220 function. We show that Trap220(-)(/)(-) cells possess a TRAP/Mediator complex that is relatively intact and compromised in its ability to support TR-dependent, but not VP16-dependent, transcription in vitro. Transfection studies using TRAP220 mutants revealed that the N terminus of TRAP220 is necessary and sufficient for stable association with the TRAP/Mediator complex and, further, that TRAP220-dependent TR function in transfected cells requires both of the NR boxes that contain the LXXLL motif implicated in nuclear receptor binding. Similarly, an analysis of isolated TRAP/Mediator complexes with mutations in either or both of the two NR boxes confirmed a critical role for them in in vitro coactivator function. The implications of these observations are discussed in terms of our present understanding of coactivator function.