From a database containing the published nuclear hormone receptor (NR) sequences I constructed an alignment of the C, D and E domains of these molecules. Using this alignment, I have performed tree reconstruction using both distance matrix and parsimony analysis. The robustness of each branch was estimated using bootstrap resampling methods. The trees constructed by these two methods gave congruent topologies. From these analyses I defined six NR subfamilies: (i) a large one clustering thyroid hormone receptors (TRs), retinoic acid receptors (RARs), peroxisome proliferator-activated receptors (PPARs), vitamin D receptors (VDRs) and ecdysone receptors (EcRs) as well as numerous orphan receptors such as RORs or Rev-erbs; (ii) one containing retinoid X receptors (RXRs) together with COUP, HNF4, tailless, TR2 and TR4 orphan receptors; (iii) one containing steroid receptors; (iv) one containing the NGFIB orphan receptors; (v) one containing FTZ-F1 orphan receptors; and finally (vi) one containing to date only one gene, the GCNF1 orphan receptor. The relationships between the six subfamilies are not known except for subfamilies I and IV which appear to be related. Interestingly, most of the liganded receptors appear to be derived when compared with orphan receptors. This suggests that the ligand-binding ability of NRs has been gained by orphan receptors during the course of evolution to give rise to the presently known receptors. The distribution into six subfamilies correlates with the known abilities of the various NRs to bind to DNA as homo- or heterodimers. For example, receptors heterodimerizing efficiently with RXR belong to the first or the fourth subfamilies. I suggest that the ability to heterodimerize evolved once, just before the separation of subfamilies I and IV and that the first NR was able to bind to DNA as a homodimer. From the study of NR sequences existing in vertebrates, arthropods and nematodes, I define two major steps of NR diversification: one that took place very early, probably during the multicellularization event leading to all the metazoan phyla, and a second occurring later on, corresponding to the advent of vertebrates. Finally, I show that in vertebrate species the various groups of NRs accumulated mutations at very different rates.