1. We have recently shown that neurones in the rostral region of the medial vestibular nucleus (MVN) develop a sustained increase in their intrinsic excitability within 4 h of a lesion of the vestibular receptors of the ipsilateral inner ear. This increased excitability may be important in the rapid recovery of resting activity in these neurones during 'vestibular compensation', the behavioural recovery that follows unilateral vestibular deafferentation. In this study we investigated the role of the acute stress that normally accompanies the symptoms of unilateral labyrinthectomy (UL), and in particular the role of glucocorticoid receptors (GRs), in the development of the increase in excitability in the rostral MVN cells after UL in the rat. 2. The compensatory increase in intrinsic excitability (CIE) of MVN neurones failed to occur in animals that were labyrinthectomized under urethane anaesthesia and kept at a stable level of anaesthesia for either 4 or 6 h after UL, so that they did not experience the stress normally associated with the vestibular deafferentation syndrome. In these animals, 'mimicking' the stress response by administration of the synthetic GR agonist dexamethasone at the time of UL, restored and somewhat potentiated CIE in the MVN cells. Administration of dexamethasone in itself had no effect on the intrinsic excitability of MVN cells in sham-operated animals. 3. In animals that awoke after labyrinthectomy, and which therefore experienced the full range of oculomotor and postural symptoms of UL, there was a high level of Fos-like immunoreactivity in the paraventricular nucleus of the hypothalamus over 1.5-3 h post-UL, indicating a strong activation of the stress axis. 4. The GR antagonist RU38486 administered at the time of UL abolished CIE in the rostral MVN cells, and significantly delayed behavioural recovery as indicated by the persistence of circular walking. The mineralocorticoid receptor (MR) antagonist spironolactone administered at the time of UL had no effect. 5. Vestibular compensation thus involves a novel form of 'metaplasticity' in the adult brain, in which the increase in intrinsic excitability of rostral MVN cells and the initial behavioural recovery are dependent both on the vestibular deafferentation and on the activation of glucocorticoid receptors, during the acute behavioural stress response that follows UL. These findings help elucidate the beneficial effects of neuroactive steroids on vestibular plasticity in various species including man, while the lack of such an effect in the guinea-pig may be due to the significant differences in the physiology of the stress axis in that species.