The strong anti-inflammatory and immunosuppressive effects of glucocorticoids are mediated primarily by the cytosolic glucocorticoid receptors. These receptors are members of the steroid hormone receptor family, a superfamily of ligand-inducible transcription factors, and exert genomic effects that can result in increased expression of regulatory—including anti-inflammatory—proteins (transactivation), or decreased production of proinflammatory proteins (transrepression). Transactivation is thought to be responsible for numerous adverse effects of glucocorticoids; transrepression is thought to be responsible for many of the clinically desirable anti-inflammatory and immunosuppressive effects of glucocorticoids. Optimized glucocorticoids, such as selective glucocorticoid receptor agonists, are being developed to try to minimize the adverse effects many patients experience. Glucocorticoids also exert their effects via rapid, nongenomic mechanisms that can be classified as involving nonspecific interactions of glucocorticoids with cellular membranes, nongenomic effects that are mediated by cytosolic glucocorticoid receptors, or specific interactions with membrane-bound glucocorticoid receptors. Increased understanding of these mechanisms of glucocorticoid action could enable the development of novel drugs with which to treat patients with inflammatory and autoimmune disease.