In eukaryotic cells, liganded RAR gamma 2/RXR alpha heterodimers activate the transcription of retinoic acid (RA) target genes and then are degraded through the ubiquitin-proteasome pathway. In this study, we dissected the role of the RAR gamma 2 and RXR alpha partners as well as of their respective AF-1 and AF-2 domains in the processes of transactivation and degradation. RAR gamma 2 is the "engine" initiating transcription and its own degradation subsequent to ligand binding. Integrity of its AF-2 domain and phosphorylation of its AF-1 domain are required for both the degradation and the transactivation of the receptor. Deletion of the whole AF-1 domain does not impair these processes but shifts the receptor toward other proteolytic pathways through RXR alpha. In contrast, RXR alpha plays only a modulatory role, cooperating with RAR gamma 2 through its AF-2 domain and its phosphorylated AF-1 domain in both the transcription activity and the degradation of the RAR gamma 2/RXR alpha heterodimers. Our results underline that the AF-1 and AF-2 domains of each heterodimer partner cooperate with one other and that this cooperation is relevant for both the transcription and degradation processes.