Recently, we reported the cloning of the nuclear orphan receptor TAK1. In this study, we characterized the sequence requirements for optimal TAK1 binding and analyzed the repression of the peroxisome proliferator-activated receptor α (PPARα) signaling pathway by TAK1. Site selection analysis showed that TAK1 has the greatest affinity for direct repeat-1 response elements (RE) containing AGGTCAAAGGTCA (TAK1-RE) to which it binds as a homodimer. TAK1 is a very weak inducer of TAK1-RE-dependent transcriptional activation. We observed that TAK1, as PPARα, is expressed within rat hepatocytes and is able to bind the peroxisome proliferator response elements (PPREs) present in the promoter of the PPARα target genes rat enoyl-CoA hydratase (HD) and peroxisomal fatty acyl-CoA oxidase (ACOX). TAK1 is unable to induce PPRE-dependent transcriptional activation and represses PPARα- mediated transactivation through these elements in a dose-dependent manner. Two-hybrid analysis showed that TAK1 does not form heterodimers with either PPARα or retinoid X receptor (RXRα), indicating that this repression does not involve a mechanism by which TAK1 titrates out PPARα or RXRα from PPAR·RXR complexes. Further studies demonstrated that the PPARα ligand 8(S)-hydroxyeicosatetraenoic acid strongly promotes the interaction of PPARα with the co-activator RIP-140 but decreases the interaction of PPARα with the co-repressor SMRT. In contrast, TAK1 interacts with RIP140 but not with SMRT and competes with PPARα for RIP-140 binding. These observations indicated that the antagonistic effects of TAK1 on PPARα·RXRα transactivation act at least at two levels in the PPARα signaling pathway: competition of TAK1 with PPARα·RXR for binding to PPREs as well as to common co-activators, such as RIP-140. Our results suggest an important role for TAK1 in modulating PPARα-controlled gene expression in hepatocytes.