The invertebrate nuclear receptor, ultraspiracle (USP), an ortholog of the vertebrate RXR, is typically modelled as an orphan receptor that functions without a ligand-binding activity. The identification of a ligand that can transcriptionally activate USP would provide heuristic leads to the structure of potentially high affinity activating compounds, with which to detect unknown regulatory pathways in which this nuclear receptor participates. We show here that the application of the sesquiterpenoid methyl epoxyfarnesoate (juvenile hormone III) to Sf9 cells induces transcription from a transfected heterologous core promoter, through a 5'-placed DR12 enhancer to which the receptor ultraspiracle (USP) binds. Isolated, recombinant USP from Drosophila melanogaster specifically binds methyl epoxyfarnesoate, whereupon the receptor homodimerizes and changes tertiary conformation, including the movement of the ligand-binding domain alpha-helix 12. Ligand-binding pocket point mutants of USP that do not bind methyl epoxyfarnesoate act as dominant negative suppressors of methyl epoxyfarnesoate-activation of the reporter promoter, and addition of wild-type USP rescues this activation. These data establish a paradigm in which the USP ligand-binding pocket can productively bind ligand with a functional outcome of enhanced promoter activity, the first such demonstration for an invertebrate orphan nuclear receptor. USP thus establishes the precedent that invertebrate orphan receptors are viable targets for development of agonists and antagonists with which to discern and manipulate transcriptional pathways dependent on USP or other orphan receptors. The demonstration here of these functional capacities of USP in a transcriptional activation pathway has significant implications for current paradigms of USP action that do not include for USP a ligand-binding activity.