Glucocorticoids are effective inhibitors of epidermal proliferation and skin tumorigenesis. Glucocorticoids affect cellular functions via glucocorticoid receptor (GR), a well-known transcription factor. Recently, we generated skin-targeted transgenic mice overexpressing GR under control of the keratin5 promoter (K5-GR mice). To test the hypothesis that GR plays a role as a tumor suppressor in skin, we bred K5-GR transgenic mice with Tg.AC transgenic mice, which express v-Ha-ras oncogene in the skin, and compared the susceptibility of F1 offspring to TPA-induced skin carcinogenesis. GR overexpression in the epidermis dramatically inhibited skin tumor development. In K5-GR/ras+ double transgenic mice papillomas developed later and the average number of tumors per animal was 15% (in males) and 40% (in females) of the number seen in wild type (w.t./ras+) littermates. In addition, the papillomas in w.t./ras+ animals were eight to nine times larger. GR overexpression resulted in a decrease in keratinocyte proliferation combined with a modest increase in apoptosis and differentiation of keratinocytes in K5-GR/ras+ papillomas. Our data clearly indicate that interference of GR transgenic protein with nuclear factor kappa B (NF-kappaB) transcription factor had resulted in NF-kappaB blockage in K5-GR/ras+ tumors. We discuss the role of NF-kappaB blockage in tumor-suppressor effect of GR.