Activation of receptor-steroid complexes to a form with high affinity for DNA is a poorly understood process involving multiple components in addition to the holoreceptor. Employing rat HTC cells as the source of glucocorticoid receptor, we show that maximal receptor binding to calf thymus DNA is mediated by a previously unknown small molecular weight factor. This factor can be removed from cytosolic preparations of receptor by gel filtration chromatography. Salt extraction of crude nuclear pellets afforded much larger amounts of a similar DNA-binding activity factor. The cytoplasmic factor and the more abundant nuclear factor were identical on the basis of their similar physical properties. The factor was precipitable in the crude state with (NH4)2SO4 and stable to heat as well as freezing and thawing. Chromatography on DNA-cellulose revealed that the factor itself did not bind to DNA. The factor could be filtered through a Centricon C-3 microconcentrator (molecular weight cutoff approximately 3000) but was excluded from Sephadex G-10 columns. These parameters enable us to determine an apparent molecular weight of 700-3000 for this factor. The presence of large amounts of this factor in nuclei accounts for the previously unexplained observation that, following size exclusion chromatography, more activated complexes bind to nuclei than to DNA. These data indicate that some, but not all, of the activated complexes require factor to be able to bind to DNA. The predominantly nuclear localization of this factor, coupled with its ability to increase DNA binding, attests to the biological relevance of this factor in the whole cell action of receptor-glucocorticoid complexes.