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Methylmercury (MeHg) is a widespread environmental contaminant with established developmental neurotoxic effects. Computational models have identified glucocorticoid receptor (GR) signaling to be a key mediator behind the birth defects induced by Hg, but the mechanisms were not elucidated. Using molecular dynamics simulations, we found that MeHg can bind to the GR protein at Cys736 (located close to the ligand binding site) and distort the conformation of the ligand binging site. To assess the functional consequences of MeHg interaction with GR, we used a human cell line expressing a luciferase reporter system (HeLa AZ-GR). We found that 100 nM MeHg does not have any significant effect on GR activity alone, but the transactivation of gene expression by GR upon Dex (a synthetic GR agonist) administration was reduced in cells pre-treated with MeHg. Similar effects were found in transgenic zebrafish larvae expressing a GR reporter system (SR4G). Next we asked whether the effects of developmental exposure to MeHg are mediated by the effects on GR. Using a mutant zebrafish line carrying a loss-of-function mutation in the GR (grS357) we could show that the effects of developmental exposure to 2.5 nM MeHg are mitigated in absence of functional GR signaling. Taken together, our data indicate that inhibition of GR signaling may have a role in the developmental neurotoxic effects of MeHg.MeHg binds to the glucocorticoid receptor and reduces its activation upon agonist binding.The effects of developmental exposure to MeHg are mitigated in GR mutants.We propose a novel stepwise approach to neurodevelopmental neurotoxicity testing.