The specific glucocorticoid binding capacity of cytosol preparations is rapidly lost on incubation at 25 degrees in the absence of ligand. We have examined this process in cell-free preparations from rat thymus, rat liver and mouse fibroblasts (L 929 cells), and we have found that the unoccupied receptor is inactivated by endogenous enzymes to a form that does not bind steroids. The inactivation can be prevented by inhibitors of phosphatase action such as molybdate, fluoride and glucose-1-phosphate. On the basis of this type of evidence we propose that the receptor activity of cytosol can be rendered inactive by a dephosphorylation process. We have now been able to partially reactivate the receptor in both L cell and rat thymus cytosols in an ATP dependent manner. If fibroblast (L cell) cytosol is preincubated to permit receptor inactivation by endogenous enzyme, further inactivation can be prevented by the addition of 10 mM molybdate and reactivation of the binding capacity can be obtained by adding 5 to 10 mM ATP in addition to molybdate. ATP dependent activation is prevented with EDTA and this block is overcome by added magnesium. ADP, CTP, GTP, and UTP are inactive. After inactivating the glucocorticoid binding capacity of rat thymocyte cytosol by incubation for 45 minutes at 25 degrees, considerable reactivation is obtained by addition of dithiothreitol and ATP. This system does not absolutely require the presence of a phosphatase inhibitor in order to show activation. Thymocyte cytosol can also be activated to a steroid binding state by addition of DTT and heat-treated (90 degrees for 15 min.) cytosol from a variety of cell types. The heat-treated cytosol contains ATP, reducing equivalents, and a relatively small molecular weight heat-stable activator(s) that potentiates the reactivation process. Maximum receptor activation is obtained by adding dithiothreitol, heat-stable factor, ATP, and molybdate to the inactivated thymocyte cytosol.