The androgen receptor (AR) is a ligand-activated transcription factor that is essential for prostate cancer development. It is activated by androgens through its ligand-binding domain (LBD), which consists predominantly of 11 α-helices. Upon ligand binding, the last helix is reorganized to an agonist conformation termed activator function-2 (AF-2) for coactivator binding. Several coactivators bind to the AF-2 pocket through conserved LXXLL or FXXLF sequences to enhance the activity of the receptor. Recently, a small compound-binding surface adjacent to AF-2 has been identified as an allosteric modulator of the AF-2 activity and is termed binding function-3 (BF-3). However, the role of BF-3 in vivo is currently unknown, and little is understood about what proteins can bind to it. Here we demonstrate that a duplicated GARRPR motif at the N terminus of the cochaperone Bag-1L functions through the BF-3 pocket. These findings are supported by the fact that a selective BF-3 inhibitor or mutations within the BF-3 pocket abolish the interaction between the GARRPR motif(s) and the BF-3. Conversely, amino acid exchanges in the two GARRPR motifs of Bag-1L can impair the interaction between Bag-1L and AR without altering the ability of Bag-1L to bind to chromatin. Furthermore, the mutant Bag-1L increases androgen-dependent activation of a subset of AR targets in a genome-wide transcriptome analysis, demonstrating a repressive function of the GARRPR/BF-3 interaction. We have therefore identified GARRPR as a novel BF-3 regulatory sequence important for fine-tuning the activity of the AR.