Excess tissue glucocorticoid action may contribute to the hyperglycemia and insulin resistance associated with type 2 diabetes, but the associated mechanisms are poorly understood. 11β-hydroxysteroid dehydrogenase type 1 (11β-HSD1) converts inactive 11-dehydrocorticosterone into active corticosterone, thus amplifying glucocorticoid receptor–mediated tissue glucocorticoid action, particularly in the liver. To examine the role of tissue glucocorticoid action in type 2 diabetes, we analyzed expression of glucocorticoid receptor and 11β-HSD1 and their regulation by endogenous hormones in vivo and in vitro in hepatocytes from db/db mice (a model of type 2 diabetes). We observed positive relations between expression of both glucocorticoid receptor and 11β-HSD1 in liver and insulin sensitivity and expression of PEPCK mRNA in db/db mice and db/+ controls. Increased expression of glucocorticoid receptor and 11β-HSD1 in the liver of db/db mice was correlated with elevated circulating levels of corticosterone, insulin, and blood glu-cose. Treatment of db/db mice with glucocorticoid antagonist RU486 reversed the increases in the expression of glucocorticoid receptor and 11β-HSD1 within the liver and attenuated the phenotype of type 2 diabetes. Addition of corticosterone to db/db mouse primary hepatocytes activated expression of glucocorticoid receptor, 11β-HSD1, and PEPCK, and these effects were abolished by RU486. Incubation of primary hepatocytes with increasing concentrations of glucose caused dose-dependent increases in glucocorticoid receptor and 11β-HSD1 expression, whereas insulin did not affect the expression of 11β-HSD1 and glucocorticoid receptor in primary hepatocytes. These findings suggest that activation of glucocorticoid receptor and 11β-HSD1 expression within the liver may contribute to the development of type 2 diabetes in db/db mice.