Glucocorticoids are potent immunosuppressants which work in part by inhibiting cytokine gene transcription. We show here that NF-κB, an important regulator of numerous cytokine genes, is functionally inhibited by the synthetic glucocorticoid dexamethasone (DEX). In transfection experiments, DEX treatment in the presence of cotransfected glucocorticoid receptor (GR) inhibits NF-κB p65-mediated gene expression and p65 inhibits GR activation of a glucocorticoid response element. Evidence is presented for a direct interaction between GR and the NF-κB subunits p65 and p50. In addition, we demonstrate that the ability of p65, p50, and c-rel subunits to bind DNA is inhibited by DEX and GR. In HeLa cells, DEX activation of endogenous GR is sufficient to block tumor necrosis factor alpha or interleukin 1 activation of NF-κB at the levels of both DNA binding and transcriptional activation. DEX treatment of HeLa cells also results in a significant loss of nuclear p65 and a slight increase in cytoplasmic p65. These data reveal a second mechanism by which NF-κB activity may be regulated by DEX. We also report that RU486 treatment of wild-type GR and DEX treatment of a transactivation mutant of GR each can significantly inhibit p65 activity. In addition, we found that the zinc finger domain of GR is necessary for the inhibition of p65. This domain is also required for GR repression of AP-1. Surprisingly, while both AP-1 and NF-κB can be inhibited by activated GR, synergistic NF-κB/AP-1 activity is largely unaffected. These data suggest that NF-κB, AP-1, and GR interact in a complex regulatory network to modulate gene expression and that cross-coupling of NF-κB and GR plays an important role in glucocorticoid-mediated repression of cytokine transcription.