Untransformed steroid receptors in cytosol preparations are associated with the 90-kDa heat shock protein hsp90, but the study of how hsp90 affects receptor function has been held back by the inability to reassociate steroid receptors with hsp90 in cell-free systems. Recently we showed (Dalman, F.C., Bresnick, E. H., Patel, P. D., Perdew, G. H., Watson, S. J., and Pratt, W. B. (1989) J. Biol. Chem. 264, 19815-19821) that glucocorticoid receptors translated in rabbit reticulocyte lysate bind to hsp90 at the termination of receptor translation. In this work we show that rabbit reticulocyte lysate promotes the temperature-dependent association of hsp90 with immunopurified mouse L cell glucocorticoid receptors. Reticulocyte lysate also promotes the temperature-dependent dissociation of hormone-free receptors from a prebound receptor-DNA complex. The glucocorticoid receptor is released from DNA in association with rabbit hsp90, and reconstitution of the receptor-hsp90 complex is accompanied by complete restitution of steroid binding activity and repression of DNA binding activity. This is the first time that transformation of a DNA-bound steroid receptor has been reversed and it raises the question of whether the same or a similar system is involved in the termination of transcriptional activation when steroid dissociates from DNA-bound receptors in intact cells.