Insulin-like growth factor I (IGF-I) is an abundant autocrine and paracrine growth factor secreted by osteoblasts. It promotes osteoblast proliferation and expression of their differentiated phenotype. Glucocorticoids decrease IGF-I production by osteoblasts, which may mediate some actions of the steroid on bone in both normal and pathological states. The mechanisms by which the glucocorticoid cortisol down-regulates IGF-I transcripts were explored using cultures of osteoblast-enriched cells derived from fetal rat calvaria (Ob cells). Repression of IGF-I transcripts was apparent after 8 h of treatment, was sustained for at least 24 h, and was not altered by cotreatment with cycloheximide. Cortisol did not alter the stability of IGF-I messenger RNAs in transcriptionally arrested Ob cells. Cortisol decreased IGF-I heterogeneous nuclear RNA and gene transcription, as determined by reverse transcription-linked polymerase chain reaction and nuclear run-on assay, respectively. Transient transfection of Ob cells with constructs containing portions of the rat IGF-I exon 1 promoter and 5'-flanking DNA linked to the reporter gene luciferase were performed to determine glucocorticoid-responsive region of the rat IGF-I exon 1 promoter was localized to 34 to 192 relative to the first start site of transcription. In conclusion, cortisol inhibits the transcription of IGF-I in osteoblasts, an effect that may be relevant to the actions of cortisol in bone.