As a key in vitro tool, we constructed a robust cellular assay system to mimic the repressor role of TLX by combining the transcriptional repressor Gal4-TLX with the potent ligand-independent transcriptional activator Gal4-VP16. An ability of Gal4-TLX to counter Gal4-VP16 induced reporter gene activity in a dose-dependent fashion allowed tuning of the test setup to observe bidirectional TLX modulation. Despite its artificial character, this cellular test system turned out very valuable for the discovery and preliminary characterization of TLX ligands, and might also be transferable to other repressive nuclear receptors such as the testicular receptors (TR). Importantly, our observations on Gal4-VP16 repression by Gal4-TLX also translated to combinations of TLX with human NRs. This validated the TLX/VP16 setting, but also unprecedentedly revealed TLX acting as a repressor towards various nuclear receptors and dimerization of TLX with RXR in cell-free setting additionally demonstrated direct interaction.