Congenital hypothyroidism and the thyroid hormone (T₃) resistance syndrome are associated with severe central nervous system (CNS) dysfunction. Because thyroid hormones are thought to act principally by binding to their nuclear receptors (TRs), it is unexplained why TR knock-out animals are reported to have normal CNS structure and function. To investigate this discrepancy further, a T₃ binding mutation was introduced into the mouse TR-β locus by homologous recombination. Because of this T₃ binding defect, the mutant TR constitutively interacts with corepressor proteins and mimics the hypothyroid state, regardless of the circulating thyroid hormone concentrations. Severe abnormalities in cerebellar development and function and abnormal hippocampal gene expression and learning were found. These findings demonstrate the specific and deleterious action of unliganded TR in the brain and suggest the importance of corepressors bound to TR in the pathogenesis of hypothyroidism.