The thyroid hormone 3,3′,5-triiodo-l-thyronine (T3) is essential for growth, differentiation, and development. Its biological activities are mediated by T3 nuclear receptors (TRs). At present, how T3 regulates TR proteins and the resulting functional consequences are still unknown. Immunofluorescence analyses of endogenous TR in the growth hormone-producing GC cells showed that the T3-induced rapid degradation of TR was specifically blocked by lactacystin, a selective inhibitor of the ubiquitin–proteasome degradation pathway. Immunoblots demonstrated that the transfected TRβ1 was ubiquitinated and that the ubiquitination was T3 independent. Studies with a series of truncated TRβ1 showed that the hormone-binding domain was sufficient for the T3-induced rapid degradation of TRβ1 by the proteasome degradation pathway. T3 also induced rapid degradation of TRβ2 and TRα1. In contrast, the stability of the non-T3-binding TRα2 and naturally occurring TRβ1 mutants that do not bind T3 was not affected by T3 treatment, indicating that hormone binding to receptor was essential for the degradation of the wild-type receptors. In the presence of proteasome protease inhibitors, the levels of both total and ubiquitinated TRβ1 protein increased, yet T3-dependent transcriptional activation and the expression of the growth hormone gene were diminished, suggesting that proteasome-mediated degradation played a novel role in modulating transcriptional activation by TR. The present study reveals a role of T3 in modulating the functions of TR by regulating its receptor level via the ubiquitin–proteasome degradation pathway.