We used glucocorticoid-resistant and -sensitive hepatoma cell variants to characterize the mechanism of hepatoma cell resistance to the growth inhibitory effects of glucocorticoids. BDS1 hepatoma cells express transcriptionally active glucocorticoid receptors and undergo a stringent G1 cell cycle arrest in response to glucocorticoids that is dependent on the induced expression of the CCAAT/enhancer binding protein alpha (C/EBPalpha) transcription factor. In contrast, EDR1 hepatoma cells, which express normal levels of glucocorticoid receptors, fail to growth arrest or express C/EBPalpha when treated with glucocorticoids. Ectopic expression of wild-type rat glucocorticoid receptors into EDR1 cells restored the growth suppression response, suggesting a defect in the EDR1 receptor. DNA sequence analysis revealed a single point mutation causing a cysteine-to-tyrosine substitution at amino acid position 457 (C457Y-GR) in the zinc finger region of the glucocorticoid receptor that mediates both receptor-DNA and receptor-protein interactions. Glucocorticoid activation of the alpha1-acid glycoprotein (AGP) promoter, a liver acute-phase response gene, requires receptor-DNA binding as well as an interaction with C/EBPalpha. In contrast to the wild-type glucocorticoid receptor, ectopic expression of C/EBPalpha in EDR1 cells, or coexpression of C/EBPalpha along with the C457Y-GR into receptor-deficient EDR3 cells was required to partially restore glucocorticoid responsiveness of the AGP promoter by the EDR1 glucocorticoid receptor. Constitutive expression of the wild-type glucocorticoid receptor, but not the C457Y-GR mutant, was sufficient to restore the glucocorticoid growth suppression response to receptor-deficient EDR3 cells. Thus, we have identified a glucocorticoid-resistant hepatoma cell variant with a single point mutation in the zinc finger region of the glucocorticoid receptor gene that ablates the glucocorticoid growth suppression response and attenuates transcriptional activation of the AGP promoter.