We previously identified a small basic leucine zipper (bZIP) protein, Jun dimerization protein 2 (JDP-2), that acts as a coregulator of the N-terminal transcriptional activation domain of progesterone receptor (PR). We show here that JDP-2, through interaction with the DNA binding domain (DBD), induces or stabilizes structure in the N-terminal domain in a manner that correlates with JDP-2 stimulation of transcriptional activity. Circular dichroism spectroscopy experiments showed that JDP-2 interaction caused a significant increase in overall helical content of a two-domain PR polypeptide containing the N-terminal domain and DBD and that the change in structure resides primarily in the N-terminal domain. Thermal melt curves showed that the JDP-2/PR complex is significantly more stable than either protein alone, and partial proteolysis confirmed that JDP-2 interaction alters conformation of the N-terminal domain of PR. Functional analysis of N-terminal domain mutants and receptor chimeras provides evidence that the stimulatory effect of JDP-2 on transcriptional activity of PR is mediated through an interdomain communication between the DBD and the N-terminal domain and that transcriptional activity and functional response to JDP-2 are mediated by multiple elements of the N-terminal domain as opposed to a discrete region.