Glutamine synthetase is a differentiation marker of the neural retina, whose expression is restricted to Müller glia cells, is inducible by glucocorticoids and is dependent on tissue development. The retina tissue acquires the competence to express GS in response to glucocorticoids with development, although the level of hormone binding activity in the cells does not alter with age. Using CAT constructs that are controlled by "simple GRE" promoters we demonstrated that glucocorticoid receptor transcription activity in retina cells increases with development. The increase in receptor activity correlates directly with the increase in inducibility of the glutamine synthetase gene and inversely with the rate of retina cell proliferation. At early developmental ages, when retina cells are still proliferating, the glucocorticoid receptor is transcriptionally inactive and glutamine synthetase expression cannot be induced. Receptor activity increases progressively with development and by day 12, when cell proliferation ceases, competence for glutamine synthetase induction is high. This competence for glutamine synthetase induction can be repressed by overexpressing the oncogene v-src, which stimulates retina cell proliferation. We discuss possible mechanisms for developmental-dependent modulation of glucocorticoid receptor transcriptional activity.