The orphan receptor CAR-β (ref. 1) binds DNA as a heterodimer with the retinoid-X receptor and activates gene transcription in a constitutive manner. Here we show that, in contrast to the classical nuclear receptors, the constitutive activity of CAR-β results from a ligand-independent recruitment of transcriptional co-activators. While searching for potential ligands of CAR-β, we found that the steroids androstanol and androstenol inhibit the constitutive activity of CAR-β. This effect is stereospecific: only 3α-hydroxy, 5α-reduced androstanes are active. These androstanes do not interfere with heterodimerization or DNA binding of CAR-β instead, they promote co-activator release from the ligand-binding domain. These androstane ligands are examples of naturally occurring inverse agonists, that reverse transcriptional activation by nuclear receptors. CAR-β (constitutive androstane receptor-β), therefore, defines an unanticipated steroidal signalling pathway that functions in a manner opposite to that of the conventional nuclear receptor pathways.