We previously reported the cloning and characterization of a novel nuclear hormone receptor transcriptional coactivator, which we refer to as NRC. NRC is a 2,063-amino-acid nuclear protein which contains a potent N-terminal activation domain and several C-terminal modules which interact with CBP and ligand-bound nuclear hormone receptors as well as c-Fos and c-Jun. In this study we sought to clone and identify novel factors that interact with NRC to modulate its transcriptional activity. Here we describe the cloning and characterization of a novel protein we refer to as NIF-1 (NRC-interacting factor 1). NIF-1 was cloned from rat pituitary and human cell lines and was found to interact in vivo and in vitro with NRC. NIF-1 is a 1,342-amino-acid nuclear protein containing a number of conserved domains, including six Cys-2/His-2 zinc fingers, an N-terminal stretch of acidic amino acids, and a C-terminal leucine zipper-like motif. Zinc fingers 1 to 3 are potential DNA-binding BED finger domains recently proposed to play a role in altering local chromatin architecture. We mapped the interaction domains of NRC and NIF-1. Although NIF-1 does not directly interact with nuclear receptors, it markedly enhances ligand-dependent transcriptional activation by nuclear hormone receptors in vivo as well as activation by c-Fos and c-Jun. These results, and the finding that NIF-1 interacts with NRC in vivo, suggest that NIF-1 functions to regulate transcriptional activation through NRC. We suggest that NIF-1, and factors which associate with coactivators but not receptors, be referred to as cotransducers, which act in vivo either as part of a coactivator complex or downstream of a coactivator complex to modulate transcriptional activity. Our findings suggest that NIF-1 may be a functional component of an NRC complex and acts as a regulator or cotransducer of NRC function.