Most patients with asthma are successfully treated with conventional therapy. Nevertheless, there is a small proportion of asthmatic patients, including present cigarette smokers and former cigarette smokers, who fail to respond well to therapy with high-dose glucocorticoids (GCs) or with supplementary therapy. In addition, high doses of steroids have a minimal effect on the inexorable decline in lung function in COPD patients and only a small effect on reducing exacerbations. GC insensitivity, therefore, presents a profound management problem in these patients. GCs act by binding to a cytosolic GC receptor (GR), which is subsequently activated and is able to translocate to the nucleus. Once in the nucleus, the GR either binds to DNA and switches on the expression of antiinflammatory genes or acts indirectly to repress the activity of a number of distinct signaling pathways such as nuclear factor (NF)-kappaB and activator protein (AP)-1. This latter step requires the recruitment of corepressor molecules. Importantly, this latter interaction is mutually repressive in that high levels of NF-kappaB and AP-1 attenuate GR function. A failure to respond may therefore result from reduced GC binding to GR, reduced GR expression, enhanced activation of inflammatory pathways, or lack of corepressor activity. These events can be modulated by oxidative stress, T-helper type 2 cytokines, or high levels of inflammatory mediators, all of which may lead to a reduced clinical outcome. Understanding the molecular mechanisms of GR action, and inaction, may lead to the development of new antiinflammatory drugs or may reverse the relative steroid insensitivity that is characteristic of patients with these diseases.