Activation function 2 in the ligand binding domain of nuclear receptors forms a hydrophobic cleft that binds the LXXLL motif of p160 transcriptional coactivators. Here we provide evidence that activation function 2 in the androgen receptor serves as the contact site for the androgen dependent NH(2)- and carboxyl-terminal interaction of the androgen receptor and only weakly interacts with p160 coactivators in an LXXLL-dependent manner. Mutagenesis studies indicate that it is the NH(2)-/carboxyl-terminal interaction that is required by activation function 2 to stabilize helix 12 and slow androgen dissociation critical for androgen receptor activity in vivo. The androgen receptor recruits p160 coactivators through its NH(2)-terminal and DNA binding domains in an LXXLL motif-independent manner. The results suggest a novel function for activation function 2 and a unique mechanism of nuclear receptor transactivation.