Several recent observations, such as the identification of the cellular homologue of the v-erb-A oncogene as a thyroid-hormone receptor, have strongly implicated nuclear oncogenes in transcriptional control mechanisms. The v-erb-A oncogene blocks the differentiation of erythroid cells, and changes the growth requirements of fibroblasts and erythroblasts. Mutations in v-erb-A protein have led to the loss of its affinity for thyroid hormones but do not affect its DNA-binding ability, a property required for biological activity. We report here the identification of a novel thyroid-hormone response element (TRE) in the long terminal repeat of Moloney murine leukaemia virus that binds the c-erb-A-alpha protein. The v-erb-A protein abolishes the responsiveness of this TRE to thyroid hormone, although it has a lower affinity than the normal receptor for the TRE. The data indicate that overexpressed v-erb-A protein negatively interferes with normal transcriptional-control mechanisms, and that amino-acid substitutions have altered its DNA-binding properties.