The constitutive androstane receptor (CAR) belongs to the superfamily of nuclear-hormone receptors that function as ligand-activated transcription factors. CAR plays an essential role in the metabolism of xenobiotics and shows--in contrast to related receptors--constitutive activity. However, the molecular basis for the constitutive activity remains unclear. In the present study, homology models of the ligand binding domain (LBD) were generated based on the crystal structures of the related pregnane X (PXR) and the vitamin D receptor (VDR). The models were used to investigate the basal activity of CAR and the effect of coactivator binding. Molecular dynamics (MD) simulations of complexed and uncomplexed receptor revealed a hypothesis for the activation mechanism. The suggested mechanism is supported by experimental results from site-directed mutagenesis. The basal activity of CAR can be explained by specific van-der-Waals interactions between amino acids on the LBD and its C-terminal activation domain (AF-2). Docking studies with the GOLD program yielded the interaction modes of structurally diverse agonists, giving insight into mechanisms by which ligands enhance CAR activity.