Dehydroepiandrosterone (DHEA) exerts beneficial effects on blood glucose levels and insulin sensitivity in obese rodents and humans, resembling the effects of peroxisome proliferator-activated receptor-gamma (PPARgamma) ligands and opposing those of glucocorticoids; however, the underlying mechanisms remain unclear. Glucocorticoids are reactivated locally by 11beta-hydroxysteroid dehydrogenase type 1 (11beta-HSD1), which is currently considered as a promising target for the treatment of obesity and diabetes. Using differentiated 3T3-L1 adipocytes, we show that DHEA causes downregulation of 11beta-HSD1 and dose-dependent reduction of its oxoreductase activity. The effects of DHEA were comparable with those of the PPARgamma agonist rosiglitazone but not additive. Furthermore, DHEA reduced the expression of hexose-6-phosphate dehydrogenase, which stimulates the oxoreductase activity of 11beta-HSD1. These findings were confirmed in white adipose tissue and in liver from DHEA-treated C57BL/6J mice. Analysis of the transcription factors involved in the DHEA-dependent regulation of 11beta-HSD1 expression revealed a switch in CCAAT/enhancer-binding protein (C/EBP) expression. C/EBPalpha, a potent activator of 11beta-HSD1 gene transcription, was downregulated in 3T3-L1 adipocytes and in liver and adipose tissue of DHEA-treated mice, whereas C/EBPbeta and C/EBPdelta, attenuating the effect of C/EBPalpha, were unchanged or elevated. Our results further suggest a protective effect of DHEA on adipose tissue by upregulating PPARalpha and downregulating leptin, thereby contributing to the reduced expression of 11beta-HSD1. In summary, we provide evidence that some of the anti-diabetic effects of DHEA may be caused through inhibition of the local amplification of glucocorticoids by 11beta-HSD1 in adipose tissue.