Gene regulatory programs are encoded in the sequence of the DNA. Since the completion of the Human Genome Project, millions of gene regulatory elements have been identified in the human genome. Understanding how each of those sites functionally contributes to gene regulation, however, remains a challenge for nearly every field of biology. Transcription factors influence cell function by interpreting information contained within cis-regulatory elements in chromatin. Whereas chromatin immunoprecipitation–sequencing has been used to identify and map transcription factor–DNA interactions, it has been difficult to assign functionality to the binding sites identified. Thus, in this study, we probed the transcriptional activity, DNA-binding competence, and functional activity of select nuclear receptor mutants in cellular and animal model systems and used this information to define the sequence constraints of functional steroid nuclear receptor cis-regulatory elements. Analysis of the architecture within sNR chromatin interacting sites revealed that only a small fraction of all sNR chromatin–interacting events is associated with transcriptional output and that this functionality is restricted to elements that vary from the consensus palindromic elements by one or two nucleotides. These findings define the transcriptional grammar necessary to predict functionality from regulatory sequences, with a multitude of future implications.