The expression of FKBP5, and its resulting protein FKBP51, is strongly induced by glucocorticoids. Numerous studies have explored their involvement in a plethora of cellular processes and diseases. There is, however, a lack of knowledge on the role of the different RNA splicing variants and the two protein isoforms, one missing functional C-terminal motifs. In this study, we use in vitro models (HeLa and Jurkat cells) as well as peripheral blood cells of a human cohort (N = 26 male healthy controls) to show that the two expressed variants are both dynamically upregulated following dexamethasone, with significantly earlier increases (starting 1–2 h after stimulation) in the short isoform both in vitro and in vivo. Protein degradation assays in vitro showed a reduced half-life (4 h vs. 8 h) of the shorter isoform. Only the shorter isoform showed a subnuclear cellular localization. The two isoforms also differed in their effects on known downstream cellular pathways, including glucocorticoid receptor function, macroautophagy, immune activation, and DNA methylation regulation. The results shed light on the difference between the two variants and highlight the importance of differential analyses in future studies with implications for targeted drug design.