The current review focuses on the molecular mechanisms and developmental roles of thyroid hormone receptors (TRs) in gene regulation and metamorphosis in Xenopus laevis and discusses implications for TR function in vertebrate development and diversity. Questions addressed are: (1) what are the molecular mechanisms of gene regulation by TR, (2) what are the developmental roles of TR in mediating the thyroid hormone (TH) signal, (3) what are the roles of the different TR isoforms, and (4) how do changes in these molecular and developmental mechanisms affect evolution? Even though detailed knowledge of molecular mechanisms of TR-mediated gene regulation is available from in vitro studies, relatively little is known about how TR functions in development in vivo. Studies on TR function during frog metamorphosis are leading the way toward bridging the gap between in vitro and in vivo studies. In particular, a dual function model for the role of TR in metamorphosis has been proposed and investigated. In this model, TRs repress genes allowing tadpole growth in the absence of TH during premetamorphosis and activate genes important for metamorphosis when TH is present. Despite the lack of metamorphosis in most other vertebrates, TR has important functions in development across vertebrates. The underlying molecular mechanisms of TR in gene regulation are conserved through evolution, so other mechanisms involving TH-target genes and TH tissue-sensitivity and dependence underlie differences in role of TR across vertebrates. Continued analysis of molecular and developmental roles of TR in X. laevis will provide the basis for understanding how TR functions in gene regulation in vivo across vertebrates and how TR is involved in the generation of evolutionary diversity.