Phospholipids (PLs) are unusual signaling hormones sensed by the nuclear receptor liver receptor homolog 1 (LRH 1), which has evolved a novel allosteric pathway to support appropriate interaction with coregulators depending on ligand status. LRH-1 plays an important role in controlling lipid and cholesterol homeostasis and is a potential target for the treatment of metabolic and neoplastic diseases. While the prospect of modulating LRH-1 via small molecules is exciting, the molecular mechanism linking PL structure to transcriptional coregulator preference is unknown. Previous studies showed that binding to an activating PL ligand, such as dilauroylphosphatidylcholine (DLPC), favors LRH-1s interaction with transcriptional coactivators to upregulate gene expression. Both crystallographic and solution based structural studies showed that DLPC binding drives unanticipated structural fluctuations outside of the canonical activation surface in an alternate activation function (AF) region, encompassing the beta-sheet-H6 region of the protein. However, the mechanism by which dynamics in the alternate AF influences coregulator selectivity remains elusive. Here we pair x-ray crystallography with molecular modeling to identify an unexpected allosteric network that traverses the protein ligand binding pocket and links these two elements to dictate selectivity. We show that communication between the alternate AF region and classical AF2 dictates the strength of the coregulator interaction. This work offers the first glimpse into the conformational dynamics that drive this unusual PL-mediated nuclear hormone receptor activation.