Peroxisome proliferator-activated nuclear hormone receptors (PPAR) are ligand-activated transcription factors that play pivotal roles in governing metabolic homeostasis and cell growth. PPARs are primarily in the nucleus but, under certain circumstances, can be found in the cytoplasm. We show here that PPARα interacts with the centrosome-associated protein CAP350. CAP350 also interacts with PPARδ, PPARγ and liver-X-receptor α, but not with the 9-cis retinoic acid receptor, RXRα. Immunofluorescence analysis indicated that PPARα is diffusely distributed in the nucleus and excluded from the cytoplasm. However, in the presence of coexpressed CAP350, PPARα colocalizes with CAP350 to discrete nuclear foci and to the centrosome, perinuclear region and intermediate filaments. In contrast, the subcellular distribution of RXRα or of thyroid hormone receptor α was not altered by coexpression of CAP350. An amino-terminal fragment of CAP350 was localized exclusively to nuclear foci and was sufficient to recruit PPARα to these sites. Mutation of the single putative nuclear hormone receptor interacting signature motif LXXLL present in this fragment had no effect on its subnuclear localization but abrogated recruitment of PPARα to nuclear foci. Surprisingly, mutation of the LXXLL motif in this CAP350 subfragment did not prevent its binding to PPARα in vitro, suggesting that this motif serves some function other than PPARα binding in recruiting PPARα to nuclear spots. CAP350 inhibited PPARα-mediated transactivation in an LXXLL-dependent manner, suggesting that CAP350 represses PPARα function. Our findings implicate CAP350 in a dynamic process that recruits PPARα to discrete nuclear and cytoplasmic compartments and suggest that altered intracellular compartmentalization represents a regulatory process that modulates PPAR function.