One of beneficial effects of glucocorticoids (GC) in inflammation may be the augmentation of macrophages' capacity for phagocytosis of apoptotic cells, a process that has a central role in resolution of inflammation. Here we define the phenotype of GC-treated monocyte-derived macrophages, comparing to IFN-gamma-treated and IL-4-treated monocyte-derived macrophages and combinatorial treatment. Our data indicate that the cytokine microenvironment at an inflammatory site will critically determine monocyte functional capacity following treatment with GC. In particular, whilst GC exert dominant regulatory effects over IFN-gamma in terms of cell surface receptor repertoire and morphology, the acquisition of a macrophage capacity for clearance of apoptotic cells is prevented by combined treatment. In terms of mechanism, GC augmentation of phagocytosis was reversed even when monocytes were pre-incubated with GC for the first 24 h of culture, a period that is critical for induction of a highly phagocytic macrophage phenotype. These findings have important implications for the effectiveness of GC in promoting acquisition of a pro-phagocytic macrophage phenotype in inflammatory diseases associated with high levels of IFN-gamma