The glucocorticoid receptor (GR) is a hormone-inducible transcription factor which activates transcription of specific genes by binding to a DNA sequence present in the promoters of inducible genes. These glucocorticoid response elements (GREs) have a conserved palindromic sequence. Each half-GRE palindrome binds one subunit of GR. We have assessed the relative affinity of GR monomers and homodimers for GRE and determined whether homodimer formation is rate-limiting for high affinity GRE binding. The in vitro affinity of GRE binding by GR homodimers was approximately 2 x 10(-10) M, whereas it was approximately 1 nM for GR monomers. While homodimer:GRE complexes were very stable, monomer:GRE complexes appeared less stable in vitro. At low receptor concentration, GR preferentially bound GRE as a homodimer. Prior dilution of GR (equilibrium shifted to monomers) before addition to a GRE binding reaction resulted in slower kinetics of binding by comparison to parallel reactions in which concentrated (largely homodimeric) GR was added first. Taken together, these experiments suggest that homodimer formation is rate-limiting for high affinity GRE binding. A GRE mutant which contained only a half-binding site and which was unable to bind GR homodimers was also unable to confer glucocorticoid-inducible transcription. Taken together with previous work, these experiments support the model that GR homodimers are required for hormone-dependent activation of transcription and that receptor homodimer formation is rate-limiting for GRE binding.