The retinoic acid‐related orphan receptor β (RORβ) exhibits a highly restricted neuronal‐specific expression pattern in brain, retina and pineal gland. So far, neither a natural RORβ target gene nor a functional ligand have been identified, and the physiological role of the receptor is not well understood. We present the crystal structure of the ligand‐binding domain (LBD) of RORβ containing a bound stearate ligand and complexed with a coactivator peptide. In the crystal, the monomeric LBD adopts the canonical agonist‐bound form. The fatty acid ligand–coactivator peptide combined action stabilizes the transcriptionally active conformation. The large ligand‐binding pocket is strictly hydrophobic on the AF‐2 side and more polar on the β‐sheet side where the carboxylate group of the ligand binds. Site‐directed mutagenesis experiments validate the significance of the present structure. Homology modeling of the other isotypes will help to design isotype‐selective agonists and antagonists that can be used to characterize the physiological functions of RORs. In addition, our crystallization strategy can be extended to other orphan nuclear receptors, providing a powerful tool to delineate their functions.