The liver X receptors (LXRs) of the nuclear receptor family are promising therapeutic targets of multiple diseases like lipid disorders, chronic inflammation, as well as different human cancers. To date, no LXR agonists or antagonists can be used in clinics, emphasizing the importance for discovering new LXR modulators. Fragment-based lead discovery (FBLD) is powerful for designing new scaffolds and new mechanistic drugs, but fragment screening has not been applied to LXRs yet, which might be due to the lack of a specific fragment screening method against the dynamic and hydrophobic ligand binding domain (LBD) of LXRs. Herein, a series of fluorescent tracers were designed, synthesized and tested. The tracer based on hyodeoxycholic acid exhibited a good capability for competitively detecting the ligand binding of LXRβ using a fluorescence polarization approach. Then, 1074 fragments were screened against the LBD of LXRβ (LXRβ-LBD), resulting in 27 binding hits. These fragment hits were further tested using the co-activator recruitment assay and reporter gene assay, and efforts in X-ray crystallography fortunately solved a co-crystal structure of LXRβ-LBD with the fragment F3 (tert-butyl-7-amino-3,4-dihydroisoquinoline-2(1H)-carboxylate). The fluorescence-based fragment screening tool and the newly identified LXRβ binding fragments provide the basis for developing novel LXRβ modulators.