Mutation of a small number of amino acids in the DNA-binding domain of the estrogen receptor to the corresponding sequence of the glucocorticoid receptor switches the specificity of the receptor in transactivation assays (Mader, S., Kumar, V., de Verneuil, H., and Chambon, P. (1989) Nature 338, 271-274). We have made the corresponding reciprocal mutations in the context of the glucocorticoid receptor DNA-binding domain and studied the binding of wild type and mutant purified proteins to palindromic glucocorticoid and estrogen response elements as well as to elements of intermediate sequence, using gel mobility shift assays. We show here that a protein with two altered amino acids binds glucocorticoid and estrogen response elements with a low but equal affinity, whereas a protein with an additional changed residue has a high affinity for estrogen response elements but still retains a considerable affinity for glucocorticoid response elements. Using binding sites of intermediate sequence we have further characterized the interaction with DNA. The in vitro DNA binding results are confirmed by in vivo transactivation assays in yeast. Finally we suggest a testable model for amino acid/base pair interactions involved in recognition by the glucocorticoid receptor DNA-binding domain of its target sequence.