Increased expression of a number of cytokines including GM-CSF is associated with chronic inflammatory conditions such as bronchial asthma. Glucocorticoid therapy results in suppression of cytokine levels by a mechanism (s) not yet fully understood. We have examined regulation of GM-CSF expression by the synthetic glucocorticoid dexamethasone in human T cells. Transient transfection assays with reporter constructs revealed that dexamethasone inhibited the function of the GM-CSF enhancer, but had no effect on regulation of GM-CSF expression occurring through the proximal promoter. Activation of the GM-CSF enhancer involves cooperative interaction between the transcription factors NF-AT and AP-1. We demonstrate here that glucocorticoid-mediated inhibition of enhancer function involves glucocorticoid receptor (GR) binding to the NF-AT/AP-1 sites. These elements, which do not constitute recognizable glucocorticoid response elements, support binding of the GR, primarily as a dimer. This binding correlates with the ability of dexamethasone to inhibit enhancer activity of the NF-AT/AP-1 elements, suggesting a competition between NF-AT/AP-1 proteins and GR.