The effect of dexamethasone on Jun N-terminal kinase (JNK) activity was assayed by using fetal hepatocytes in primary culture. The addition of tumor necrosis factor α (TNF-α) caused an increase in JNK in a dose- and time-dependent manner. We show that activation of JNK by this extracellular signal is inhibited by dexamethasone in a dose-dependent fashion. This inhibitory effect was observed in cells treated for 10 minutes with dexamethasone in the presence of protein phosphatase inhibitors such as orthovanadate or okadaic acid, or in cells previously treated with actinomycin D. Glucocorticoid receptor (GR) can be precipitated with the fusion protein, GST–c-Jun (1-79), bound to agarose beads. However, the inhibitory effect of glucocorticoids on JNK activity was also observed using ATF-2 as substrate. In addition, dexamethasone inhibits JNK phosphorylation induced by TNF-α. Finally, we show that GR can also be phosphorylated in tyrosine residues in response to TNF-α and epidermal growth factor (EGF) upon ligand-binding. Our results suggest that the anti-inflammatory effect of glucocorticoids on the inflammatory pathways induced by TNF-α can be explained, at least in part, by modulating JNK activity through a direct protein-protein interaction; the JNK phosphorylation and tyrosine-phosphorylation state of GR may be regulatory steps also involved in that effect.