To activate transcription, most nuclear receptor proteins require coactivators that bind to their ligand-binding domains (LBDs). The Drosophila FTZ-Factor1 (FTZ-F1) protein is a conserved member of the nuclear receptor superfamily, but was previously thought to lack an AF2 motif, a motif that is required for ligand and coactivator binding. Here we show that FTZ-F1 does have an AF2 motif and that it is required to bind a coactivator, the homeodomain-containing protein Fushi tarazu (FTZ). We also show that FTZ contains an AF2-interacting nuclear receptor box, the first to be found in a homeodomain protein. Both interaction motifs are shown to be necessary for physical interactions in vitro and for functional interactions in developing embryos. These unexpected findings have important implications for the conserved homologs of the two proteins.