The diverse function of retinoic acid (RA) is mediated by its nuclear receptors, the retinoic acid receptors (RARs) and retinoid X receptors (RXRs). However, the RA response is often lost in cancer cells that express the receptors. Previously, it was demonstrated that the RA response is regulated by the COUP-TF orphan receptors. Here, we present evidence that nur77, another orphan receptor whose expression is highly induced by phorbol esters and growth factors, is involved in modulation of the RA response. Expression of nur77 enhances ligand-independent transactivation of RA response elements (RAREs) and desensitizes demontheir RA responsiveness. Conversely, expression of COUP-TF sensitizes RA responsiveness of RAREs by repressing their basal transactivation activity. Unlike the effect of COUP-TFs, the function of nur77 does not require direct binding of nur77 to the RAREs, but is through interaction between nur77 and COUP-TFs. The interaction occurs in solution and results in inhibition of COUP-TF RARE binding and transcrip-tional activity. Unlike other nuclear receptors, a large portion of the carboxy-terminal end of nur77 is not required for its interaction with COUP-TF. In human lung cancer cell lines, COUP-TF is highly expressed in RA-sensitive cell lines while nur77 expression is associated with RA resistance. Stable expression of COUP-TF in nur77-positive, RA-resistant lung cancer RAcells enhances the inducibility of RARb gene expression and growth inhibition by RA. These observations predemonstrate that a dynamic equilibrium between orphan receptors nur77 and COUP-TF, through their heterodimerization that regulates COUP-TF RARE binding, is critical for RA responsiveness of human lung cancer cells.