To determine the mechanism of glucocorticoid (GC)-mediated inhibition of T cell functions, the effect of dexamethasone (DM) on T cell proliferation and interleukin-2 receptor (IL-2R) generation were studied. Dexamethasone inhibited IL-2-induced T cell proliferation by 30%-88%, relative to its concentration within the cultures. The effect of DM on expression of IL-2R alpha (Tac, p55, CD25) and beta (p75) genes in activated T cells was examined next. In T cells stimulated with purified phytohemagglutinin (PHA-p) and 4 beta-phorbol 12-myristate 13-acetate (PMA) addition of DM to the cultures resulted in a 60% reduction in IL-2R alpha and a 30% reduction in IL-2R beta membrane expression compared to T cells cultured in the absence of DM (p < 0.01). Inhibition of membrane IL-2R alpha and IL-2R beta expression by 10(-6) M DM was partially reversible by recombinant human IL-2 (rhIL-2). By Northern blot analysis, DM caused a comparable decrease in IL-2R alpha and in IL-2R beta mRNA levels to membrane receptor expression in mitogen-stimulated T cells. By in vitro transcription assays, DM regulated IL-2R alpha gene expression at a transcriptional level while transcription of IL-2R beta gene was unaffected by DM. The mechanism of action of DM on IL-2R alpha transcription was examined by determining the mRNA levels of the p50 subunit of nuclear factor kappa B (NF-kappa B), a transcription factor that stimulates IL-2R alpha gene expression. The data indicate that 10(-6) M DM increased T cell p50 NF-kappa B mRNA levels by four-fold compared to the levels obtained in the absence of DM. Further, the level of nuclear proteins capable of binding to the NF-kappa B sites in activated T cells increased in response to DM. In sum, DM regulates T cell membrane expression of IL-2R by more than one molecular mechanism.