A novel selective glucocorticoid receptor (GR) agonist, AZD2906, was found to increase the incidence of micronucleated immature erythrocytes (MIE) in the bone marrow of rats given two oral doses at the maximum tolerated level. Because GR agonists as a class are considered not to be genotoxic and AZD2906 showed no activity in the standard in vitro tests or in vivo in a rat liver comet assay, investigative studies were performed to compare AZD2906 with a reference traditional GR agonist, prednisolone. Emphasis was placed on blood and bone marrow parameters in these studies because GR activation has been reported to induce erythropoiesis which, in turn, is known to increase MIE in the bone marrow. Both compounds induced almost identical, small increases in micronucleus frequency at all doses tested. Directly comparable changes in haematological and bone marrow parameters were also seen with significant decreases in lymphoid cells in both compartments and significant increases in numbers of circulating neutrophils. Although no evidence of increased erythropoiesis was seen as increased immature erythrocyte numbers either in the blood or in the bone marrow, histopathological examination showed focal areas in the bone marrow where the erythroid population was enriched in association with an atrophic myeloid lineage. This could have been due to direct stimulation of the erythroid lineage or a secondary effect of myelosuppression inducing a rebound increase in erythropoiesis into the vacant haematopoietic cell compartment. It was concluded that the increased MIE frequencies induced by both AZD2906 and prednisolone are a consequence of their pharmacological effects on the bone marrow, either by directly inducing erythropoiesis or by some other unknown effect on cellular function, and do not indicate potential genotoxicity. This conclusion is supported by the lack of carcinogenic risk in man demonstrated by decades of clinical use of prednisolone and other GR agonists.