Activating signal cointegrator 2 (ASC-2), a cancer-amplified transcriptional coactivator of nuclear receptors and many other transcription factors, contains two LXXLL-type nuclear receptor interaction domains. Interestingly, the second LXXLL motif is highly specific to the liver X receptors (LXRs). In cotransfection, DN2, an ASC-2 fragment encompassing this motif, exerts a potent dominant-negative effect on transactivation by LXRs, which is rescued by ectopic coexpression of the full-length ASC-2 but not by other LXXLL-type coactivators, such as SRC-1 and TRAP220. In contrast, DN2/m, in which the LXXLL motif is mutated to LXXAA to abolish the interactions with LXRs, is without any effect. Accordingly, expression of DN2, but not DN2/m, in transgenic mice results in phenotypes that are highly homologous to those previously observed with LXRα^−/− mice, including a rapid accumulation of large amounts of cholesterol and down-regulation of the known lipid-metabolizing target genes of LXRα in the liver upon being fed a high-cholesterol diet. These results identify ASC-2 as a physiologically important transcriptional coactivator of LXRs and demonstrate its pivotal role in the liver lipid metabolism.