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Glucocorticoids are highly effective in the therapy of inflammatory and autoimmune disorders. Their beneficial action is restricted because of their adverse effects upon prolonged usage. Topical glucocorticoids that act locally have been developed to significantly reduce systemic side effects. Nonetheless, undesirable cutaneous effects such as skin atrophy persist from the use of topical glucocorticoids. There is therefore a high medical need for drugs as effective as glucocorticoids but with a reduced side-effect profile. Glucocorticoids function by binding to and activating the glucocorticoid receptor that positively or negatively regulates the expression of specific genes. Several experiments suggest that the negative regulation of gene expression by the glucocorticoid receptor accounts for its anti-inflammatory action. This occurs through direct or indirect binding of the receptor to transcription factors such as activator protein-1, nuclear factor-κB or interferon regulatory factor-3 that are already bound to their regulatory sites. The positive action of the receptor occurs through homodimer binding of the receptor to discrete nucleotide sequences and this possibly contributes to some of the adverse effects of the hormone. Glucocorticoid receptor ligands that promote the negative regulatory action of the receptor with reduced positive regulatory function should therefore show improved therapeutic potential. A complete separation of the positive from the negative regulatory activities of the receptor has so far not been possible because of the interdependent nature of the two regulatory processes. Nevertheless, considerable improvement in the therapeutic action of glucocorticoid receptor ligands is being achieved through the use of key molecular targets for screening novel glucocorticoid receptor ligands.