Glucocorticoids are extensively used in combination chemotherapy of advanced prostate cancer (PC). Little is known, however, about the status of the glucocorticoid receptor (GR) in PC. We evaluated over 200 prostate samples and determined that GR expression was strongly decreased or absent in 70–85% of PC. Similar to PC tumors, some PC cell lines, including LNCaP, also lack GR. To understand the role of GR, we reconstituted its expression in LNCaP cells using lentiviral approach. Treatment of LNCaP-GR cells with the glucocorticoids strongly inhibited proliferation in the monolayer cultures and blocked anchorage-independent growth. This was accompanied by upregulation of p21 and p27, down-regulation of cyclin D1 expression and c-Myc phosphorylation. Importantly, the activation of GR resulted in normalized expression of PC markers hepsin, AMACR, and maspin. On the signaling level, GR decreased expression and inhibited activity of the MAP-kinases (MAPKs) including p38, JNK/SAPK, Mek1/2 and Erk1/2. We also found that activation of GR inhibited activity of numerous transcription factors (TF) including AP-1, SRF, NF-κB, p53, ATF-2, CEBPα, Ets-1, Elk-1, STAT1 and others, many of which are regulated via MAPK cascade. The structural analysis of hepsin and AMACR promoters provided the mechanistic rationale for PC marker downregulation by glucocorticoids via inhibition of specific TFs. Our data suggest that GR functions as a tumor suppressor in prostate, and inhibits multiple signaling pathways and transcriptional factors involved in proliferation and transformation.