Nuclear hormone receptors are ligand-activated transcription factors that regulate the expression of genes that are essential for development, reproduction and homeostasis. The hormone response is mediated through recruitment of p160 receptor coactivators and the general transcriptional coactivator CBP/p300, which function synergistically to activate transcription. These coactivators exhibit intrinsic histone acetyltransferase activity, function in the remodelling of chromatin, and facilitate the recruitment of RNA polymerase II and the basal transcription machinery. The activities of the p160 coactivators are dependent on CBP. Both coactivators are essential for proper cell-cycle control, differentiation and apoptosis, and are implicated in cancer and other diseases. To elucidate the molecular basis of assembling the multiprotein activation complex, we undertook a structural and thermodynamic analysis of the interaction domains of CBP and the activator for thyroid hormone and retinoid receptors. Here we show that although the isolated domains are intrinsically disordered, they combine with high affinity to form a cooperatively folded helical heterodimer. Our study uncovers a unique mechanism, called 'synergistic folding', through which p160 coactivators recruit CBP/p300 to allow transmission of the hormonal signal to the transcriptional machinery.