Extensive studies during the past decades provided compelling evidence that glucocorticoids (GCs) have the potential to affect the development, survival and death of neurones. These observations, however, reflect paradoxical features of GCs, as they may be critically involved in both neurodegenerative and neuroprotective processes. Hence, we first address different aspects of the complex role of GCs in neurodegeneration and neuroprotection, such as concentration dependent actions of GCs on neuronal viability, anatomical diversity of GC-mediated mechanisms in the brain and species and strain differences in GC-induced neurodegeneration. Second, the modulatory action of GCs during development and ageing of the central nervous system, as well as the contribution of altered GC balance to the pathogenesis of neurodegenerative disorders is considered. In addition, we survey recent data as to the possible mechanisms underlying the neurodegenerative and neuroprotective actions of GCs. As such, two major aspects will be discerned: (i) GC-dependent offensive events, such as GC-induced inhibition of glucose uptake, increased extracellular glutamate concentration and concomitant elevation of intracellular Ca(2+), decrease in GABAergic signalling and regulation of local GC concentrations by 11 beta-hydroxysteroid dehydrogenases; and (ii) GC-related cellular defence mechanisms, such as decrease in after-hyperpolarization, increased synthesis and release of neurotrophic factors and lipocortin-1, feedback regulation of Ca(2+) currents and induction of antioxidant enzymes. The particular relevance of these mechanisms to the neurodegenerative and neuroprotective effects of GCs in the brain is discussed.