We have isolated mutant derivatives of M1.54 (a mammary tumor virus [MTV]infected rat hepatoma [HTC] cell line containing multiple integrated proviruses) that fail to express hormone-inducible cell surface viral glycoproteins. In wildtype M1.54, the synthetic glucocorticoid dexamethasone selectively stimulates the rate of synthesis of MTV RNA. In addition, dexamethasone is essential for posttranslational maturation of three of the four cell surface viral glycoproteins processed from the MTV glycosylated precursor polyprotein; the fourth mature species is produced constitutively. Two mutant phenotypes are described; each contains glucocorticoid receptors that are indistinguishable from the wild-type receptor with respect to hormone affinity, intracellular concentration, nuclear translocation efficiency, DNA-cellulose chromatography, and sedimentation rate. In one class, represented by the mutant line CR1, dexamethasone fails to stimulate the low basal rate of MTV gene transcription; surprisingly, hormonal regulation of tyrosine aminotransferase activity is also defective in CR1, whereas several other cellular responses to dexamethasone are normal. In the second class of mutants, represented by CR4, dexamethasone stimulates synthesis of MTV transcripts indistinguishable from those produced in M1.54, but only the constitutive cell surface viral glycoprotein is expressed. Thus, these mutants define two distinct and novel aspects of glucocorticoid regulated gene expression in HTC cells: CR4 contains a defect in a hormone inducible protein maturation pathway that acts on specific viral (and presumably cellular) precursor polypeptides, whereas the lesion in CR1 appears to affect the expression of a subset of the gene products normally under glucocorticoid control in M1.54.Among vertebrates, glucocorticoid hormones affect the expression of specific genes in virtually every tissue; interestingly, the set of gene products whose synthesis or activities are altered, i.e., the glucocorticoid domain (16), is highly cell type specific (2). The effects of glucocorticoids and other steroids appear to be mediated by hormone-specific intracellular receptor proteins; the hormone-receptor interaction potentiates a change in the receptor (activation) that results in its increased affinity for DNAcontaining sites in the cell nucleus (see reference 44 for review). Purified glucocorticoid-receptor complexes bind in vitro with high affinity to specific sites on cloned mouse mammary tumor virus (MTV) DNA (25), whose expression in vivo is glucocorticoid regulated (see reference 29 for review); this is consistent with the view that selective receptor-DNA interactions participate in defining the stringent gene selectivity of hormone responses.The glucocorticoid-receptor complex stimulates the rate of MTV gene transcription in infected cells (31,41,49) by increasing the efficiency of MTV promoter utilization