Ultraspiracle (USP) is the invertebrate homologue of the mammalian retinoid X receptor (RXR). RXR plays a uniquely important role in differentiation, development, and homeostasis through its ability to serve as a heterodimeric partner to many other nuclear receptors. RXR is able to influence the activity of its partner receptors through the action of the ligand 9-cis retinoic acid. In contrast to RXR, USP has no known high-affinity ligand and is thought to be a silent component in the heterodimeric complex with partner receptors such as the ecdysone receptor. Here we report the 2.4-A crystal structure of the USP ligand-binding domain. The structure shows that a conserved sequence motif found in dipteran and lepidopteran USPs, but not in mammalian RXRs, serves to lock USP in an inactive conformation. It also shows that USP has a large hydrophobic cavity, implying that there is almost certainly a natural ligand for USP. This cavity is larger than that seen previously for most other nuclear receptors. Intriguingly, this cavity has partial occupancy by a bound lipid, which is likely to resemble the natural ligand for USP.