When isolated from cells grown under hormone-free conditions, the glucocorticoid receptor (GR) is known to exist as a large heteroprotein complex that contains, among its multiple components, the stress protein hsp90 (heat shock protein 90). To explore hsp90's role in mediating glucocorticoid hormone action, we have examined the effects of a selective hsp90-binding agent, geldanamycin (GA), or GR structure and function. Using a steroid-responsive reporter construct, we found that GA inhibited the dexamethasone-dependent transactivating activity of GR in transfected cells. At the molecular level, GA bound hsp90, but not GR, in a stable and specific manner in intact cells. GA treatment of cells did not inhibit coprecipitation of hsp90 or hsp70 with the GR but did result in a complete loss of the recently described p23 protein from GR immunoprecipitates. This drug-induced alteration in GR heteroprotein complex composition was associated with a rapid (15-30 min), noncompetitive loss of dexamethasone-binding activity. Longer exposures of cells to GA (2-8 h), resulted in a marked decline in the cellular level of GR protein. Pulse-chase data revealed that this decline resulted from a decrease in GR protein stability, not rate of synthesis. GA-induced declines in GR protein level were blocked by cotreatment of cells with lactacystin, a selective inhibitor of 20S proteasome activity, suggesting the possible involvement of the ubiquitin-proteasome pathway in mediating GA-induced decreases in GR protein abundance. Overall, these findings provide direct pharmacological evidence that hsp90 function is required to maintain both the hormone-binding activity and stability of the GR protein in intact cells and suggest that hsp90 function may provide a novel target for the modulation of steroid hormone signaling.