The functional insect ecdysteroid receptor is comprised of the ecdysone receptor (EcR) and Ultraspiracle (USP). The ligand-binding domain (LBD) of USP was fused to the GAL4 DNA-binding domain (GAL4-DBD) and characterized by analyzing the effect of site-directed mutations in the LBD. Normal and mutant proteins were tested for ligand and DNA binding, dimerization, and their ability to induce gene expression. The presence of helix 12 proved to be essential for DNA binding and was necessary to confer efficient ecdysteroid binding to the heterodimer with the EcR (LBD), but did not influence dimerization. The antagonistic position of helix 12 is indispensible for interaction between the fusion protein and DNA, whereas hormone binding to the EcR (LBD) was only partially reduced if fixation of helix 12 was disturbed. The mutation of amino acids, which presumably bind to a fatty acid evoked a profound negative influence on transactivation ability, although enhanced transactivation potency and ligand binding to the ecdysteroid receptor was impaired to varying degrees by mutation of these residues. Mutations of one fatty acid-binding residue within the ligand-binding pocket, 1323, however, evoked enhanced transactivation. The results confirmed that the LBD of Ultraspiracle modifies ecdysteroid receptor function through intermolecular interactions and demonstrated that the ligand-binding pocket of USP modifies the DNA-binding and transactivation abilities of the fusion protein.