Thyroid hormone (T-3) and retinoic acid (RA) are essential for normal
vertebrate development and are known to coregulate several genes. Earl
y development is predominantly retinoic acid sensitive, yet thyroid ho
rmone receptor-alpha (T(3)R alpha) is expressed along with retinoic ac
id receptors (RAR)-alpha, -beta, and -gamma. To determine the role of
unliganded T(3)R alpha in early development and on RA-stimulated neura
l development, we used homologous recombination techniques to inactiva
te both T(3)R alpha gene alleles in mouse embryonic stem (ES) cells. L
oss of both T(3)R alpha alleles resulted in an increase in basal and R
A-induced expression of the endogenous RA-responsive genes, RAR beta a
nd alkaline phosphatase, which demonstrates that T(3)R alpha has an in
hibitory effect on the RA response. A similar magnitude of T(3)R inhib
ition of the RA response was seen in transient transfection assays of
RA response elements in both ES and JEG cells. Cotransfection experime
nts were used to demonstrate that inhibition of the RA response could
be mediated by T(3)R alpha 1. The addition of T(3)R alpha 1, but not t
he T(3)R alpha variant c-erbA alpha 2, to T(3)R alpha-null ES cells re
stored the inhibitory effect on RA-induced gene expression. RA-stimula
ted neural differentiation was seen in the wild-type, but not in T(3)R
alpha-null ES, cells, consistent with reports of abnormal neural deve
lopment as a consequence of premature RA stimulation. Our results demo
nstrate that the early expression of unliganded T(3)R alpha functions
to modulate the RA response and RA-stimulated neural differentiation.