Seven-up (Svp), the Drosophila homolog of the chicken ovalbumin upstream transcription factor (COUP-TF); Ultraspiracle (Usp), the Drosophila homolog of the retinoid X receptor; and the ecdysone receptor are all members of the nuclear/steroid receptor superfamily. COUP-TF negatively regulates hormonal signaling involving retinoid X receptor in tissue culture systems. Here we demonstrate that Svp, like COUP-TF, can modulate Ultraspiracle-based hormonal signaling both in vitro and in vivo. Transfection assays in CV-1 cells demonstrate that Seven-up can inhibit ecdysone-dependent transactivation by the ecdysone receptor complex, a heterodimeric complex of Usp and ecdysone receptor. This repression depends on the dose of Svp and occurs with two different Drosophila ecdysone response elements. Ectopic expression of Svp in vivo induces lethality during early metamorphosis, the time of maximal ecdysone responsiveness. Concomitant overexpression of Usp rescues the larvae from the lethal effects of Svp. DNA binding studies show that Svp can bind to various direct repeats of the sequence AGGTCA but cannot bind to one of the ecdysone response elements used in the transient transfection assays. Our results suggest that Svp-mediated repression can occur by both DNA binding competition and protein-protein interactions.