Exposure of the Fu5 rat hepatoma cell line to glucocorticoids, such as dexamethasone and hydrocortisone, suppressed the growth rate and final density of cells grown in the presence of serum. This hormonal effect was proportional to receptor occupancy and affinity and, in addition, the glucocorticoid antagonist RU38486 prevented this response. Two classes of dexamethasone-resistant variants that failed to be growth inhibited were recovered from ethyl methylsulfonate-mutagenized populations by continuous culture in the presence of 1 microM dexamethasone. The first class, represented by the EDR3 subclone, was completely glucocorticoid unresponsive and failed to express receptor transcripts. The second class, represented by the EDR1, EDR5, and EDR7 subclones, possessed significant levels of glucocorticoid receptor but were only partially glucocorticoid responsive when stimulated with saturating levels of hormone. Introduction of functional glucocorticoid receptor genes into both classes of dexamethasone-resistant variants by a recombinant retrovirus expression vector restored glucocorticoid responsiveness and suppression of cell growth. A hypersensitive variant (BDS1), recovered by bromodeoxyuridine selection, was fully glucocorticoid responsive, and its inhibition of proliferation was more acutely regulated by dexamethasone. Taken together, our results established that the inhibition of proliferation in Fu5 rat hepatoma cells represents a new glucocorticoid response that requires the expression of a functional glucocorticoid receptor.