Effects of steroid hormones on the regulation of function and morphology of microglial cells were investigated using the cultured cells isolated from forebrain of newborn rats. Cortisol, corticosterone, and aldosterone at 100 nM caused a strong shrinkage of microglial cells cultured in a serum-supplemented medium. However, cholesterol, pregnenolone, testosterone, estradiol, and dehydroepiandrosterone did not exhibit any significant effects. The corticosteroids also inhibited the GM-CSF-mediated ramification of microglia in a serum-free medium. An anti-glucocorticoid agent RU38486 abolished the effects of corticosteroids on the microglial morphology, suggesting the presence of functional glucocorticoid receptor (GR) in microglial cells. The presence of GR was confirmed by immunoblotting with an antibody to the receptor. Cytokines GM-CSF and interleukin-3 altered the level of GR expression. Binding experiments with [ 3 H]-corticosterone demonstrated the presence of not only GR but also mineralocorticoid receptor (MR): the dissociation constants (Kd) and the number of binding sites (Bmax) were 0.8 nM and 15 fmol/mg protein for MR and 5.0 nM and 73 fmol/mg protein for GR, respectively. The pure glucocorticoid RU28362 and dexamethasone at 20 nM (but not aldosterone and corticosterone at the same concentration) inhibited proliferation of microglial cells, as revealed by PCNA immunocytochemistry. RU28362 inhibited the activities of inducible nitric oxide synthase and acid phosphatase at concentrations higher than 1 nM. Aldosterone and corticosterone exhibited the similar inhibitory effect at 100 nM, and this inhibition was completely overcome by RU38486. On the other hand, corticosterone and aldosterone at concentrations lower than 1 nM enhanced the activities of both enzymes. The antimineralocorticoid agent spironolactone eliminated the stimulatory effects of corticosterone on the enzyme activities. In accordance with these biochemical results, electron microscopic observations revealed that glucocorticoids enhanced the formation of lysosomal vacuolation in microglial cells and aldosterone increased the number and size of lysosomes. In conclusion, it is suggested that GR and MR mediated the opposite effects of corticosterone on the functions of microglial cells; the hormone acted as an inhibitor through GR and as an stimulator through MR.