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Many cellular signals are hydrophilic and cannot pass through the plasma membrane. However, small or hydrophobic signaling molecules can cross the hydrophobic core of the plasma membrane and bind intracellular receptors that reside within the cell cytoplasm or nucleus. Many mammalian steroid hormones and nitric oxide (NO) gas use this cell signaling mechanism.

Similar to membrane-bound receptors, the binding of a ligand to the intracellular receptor of causes a conformational change in the receptor to activate it. Like transcription factors, the active receptor can bind to receptor-specific DNA binding sites to increase or decrease the transcription of the target genes. In the case of an intracellular receptor located in the cytoplasm, the receptor-ligand complex must first cross the nuclear membrane.

Many steroid hormones, including estrogen and testosterone, use intracellular receptors to induce specific effects. For example, estrogen can diffuse across the membrane; binding of estrogen to its receptor results in dimerization of the receptors and transport of the ligand-receptor complex into the nucleus. Once in the nucleus, the complex can bind to DNA sequences called Estrogen-Response Elements (EREs). Depending on the other transcription factors and co-activators, the binding of activated estrogen receptors to EREs may cause an increase or decrease in the transcription of target genes.

Activating other intracellular receptors, such as some thyroid hormone receptors, requires ligands to cross both the plasma membrane and nuclear membrane, as the corresponding receptors usually reside in the nucleus.

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