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Belonging to the family of steroid hormones, glucocorticoids are essential for development and survival of vertebrates. The cellular response to glucocorticoids is attributed to the glucocorticoid receptor, which functions as a transcription factor. However, the majority of glucocorticoid-modulated genes lack a DNA binding site for the glucocorticoid receptor, raising the question of which mechanism mediates the responses to glucocorticoids. It has been suggested that besides direct DNA binding of the glucocorticoid receptor, interaction with members of other transcription factor families modulates the effect of the glucocorticoid receptor. However, the significance of such transcription factor interaction is not clear. In cultured human mesenchymal cells and peripheral blood leukocytes of human volunteers treated with glucocorticoids, we detected the formation of a complex between the GR and the CCAAT/enhancer binding protein alpha. In in vitro experiments, this interaction turned out to be responsible for the inhibitory action of glucocorticoids on lymphocytic and mesenchymal cell proliferation. Our results suggest that complex formation of the GR with C/EBPalpha accounts for a novel pathway of glucocorticoid action.