Steroid receptors bind to site-specific response elements in chromatin and modulate gene expression in a hormone-dependent fashion. With the use of a tandem array of mouse mammary tumor virus reporter elements and a form of glucocorticoid receptor labeled with green fluorescent protein, targeting of the receptor to response elements in live mouse cells was observed. Photobleaching experiments provide direct evidence that the hormone-occupied receptor undergoes rapid exchange between chromatin and the nucleoplasmic compartment. Thus, the interaction of regulatory proteins with target sites in chromatin is a more dynamic process than previously believed.