Previously, it has been shown that the hormone binding domain of the glucocorticoid receptor acts as a transferable regulatory cassette that can confer hormonal control onto chimeric proteins [Picard, D., Salser, S. J., & Yamamoto, K. R. (1988) Cell 54, 1073-1080]. The hormone binding domain of the glucocorticoid receptor contains its site of interaction with the 90-kDa heat-shock protein, hsp90 [Dalman, F. C., Scherrer, L. C., Taylor, L. P., Akil, H., & Pratt, W. B. (1991) J. Biol. Chem. 266, 3482-3490]. We have now transfected COS cells with cDNAs for fusion proteins containing beta-galactosidase and portions of the glucocorticoid receptor, and we demonstrate a correlation between hormone regulation of fusion protein localization and binding of the fusion proteins to hsp90. The hormone binding domain (residues 540-795) of the rat glucocorticoid receptor is sufficient for conferring hormone regulation onto a fusion protein and for intracellular binding of a fusion protein to hsp90. The hormone binding domain of the rat glucocorticoid or the human estrogen receptor is also sufficient to permit reticulocyte lysate-mediated refolding of a fusion protein into association with hsp90. Consistent with the results of fusion protein localization in intact cells, binding of a fusion protein to hsp90 blocks binding of antibody directed against the NL1 nuclear localization signal of the glucocorticoid receptor. These observations argue strongly that the hormone binding domain of the glucocorticoid receptor confers hormonal control of fusion proteins by conferring hormone-regulated binding to hsp90.