The silencing mediator for retinoid and thyroid hormone receptors (SMRT) serves as a platform for transcriptional repression elicited by several steroid/nuclear receptors and transcription factors. SMRT exists in two major splicing isoforms, alpha and tau, with SMRTalpha containing only an extra 46-amino acid sequence inserted immediately downstream from the C-terminal corepressor motif. Little is known about potential functional differences between these two isoforms. Here we show that the pregnane X receptor (PXR) interacts more strongly with SMRTalpha than with SMRTtau both in vitro and in vivo. It is interesting that the PXR-SMRTalpha interaction is also resistant to PXR ligand-induced dissociation, in contrast to the PXR-SMRTtau interaction. SMRTalpha consistently inhibits PXR activity more efficiently than does SMRTtau in transfection assays, although they possess comparable intrinsic repression activity and association with histone deacetylase. We further show that the mechanism for the enhanced PXR-SMRTalpha interaction involves both the 46-amino acid insert and the C-terminal corepressor motif. In particular, the first five amino acids of the SMRTalpha insert are essential and sufficient for the enhanced binding of SMRTalpha to PXR. Furthermore, we demonstrate that Tyr2354 and Asp2355 residues of the SMRTalpha insert are most critical for the enhanced interaction. In addition, expression data show that SMRTalpha is more abundantly expressed in most human tissues and cancer cell lines, and together these data suggest that SMRTalpha may play a more important role than SMRTtau in the negative regulation of PXR.