Histone H3 lysine-9 methyltransferase G9a/EHMT2/KMT1C is a key corepressor of gene expression. However, activation of a limited number of genes by G9a (independent of its catalytic activity) has also been observed, although the precise molecular mechanisms are unknown. By using RNAi in combination with gene expression microarray analysis, we found that G9a functions as a positive and a negative transcriptional coregulator for discrete subsets of genes that are regulated by the hormone-activated Glucocorticoid Receptor (GR). G9a was recruited to GR-binding sites (but not to the gene body) of its target genes and interacted with GR, suggesting recruitment of G9a by GR. In contrast to its corepressor function, positive regulation of gene expression by G9a involved G9a-mediated enhanced recruitment of coactivators CARM1 and p300 to GR target genes. Further supporting a role for G9a as a molecular scaffold for its coactivator function, the G9a-specific methyltransferase inhibitor UNC0646 did not affect G9a coactivator function but selectively decreased G9a corepressor function for endogenous target genes. Overall, G9a functioned as a coactivator for hormone-activated genes and as a corepressor in support of hormone-induced gene repression, suggesting that the positive or negative actions of G9a are determined by the gene-specific regulatory environment and chromatin architecture. These findings indicate distinct mechanisms of G9a coactivator vs. corepressor functions in transcriptional regulation and provide insight into the molecular mechanisms of G9a coactivator function. Our results also suggest a physiological role of G9a in fine tuning the set of genes that respond to glucocorticoids.