Glucocorticoids (GCs) are commonly used to treat inflammatory disease; unfortunately, the long-term use of these steroids leads to a large number of debilitating side effects. The antiinflammatory effects of GCs are a result of GC receptor (GR)-mediated inhibition of expression of proinflammatory genes as well as GR-mediated activation of antiinflammatory genes. Similarly, side effects are most likely due to both activated and repressed GR target genes in affected tissues. An as yet unachieved pharmaceutical goal is the development of a compound capable of separating detrimental side effects from antiinflammatory activity. We describe the discovery and characterization of AL-438, a GR ligand that exhibits an altered gene regulation profile, able to repress and activate only a subset of the genes normally regulated by GCs. When tested in vivo, AL-438 retains full antiinflammatory efficacy and potency comparable to steroids but its negative effects on bone metabolism and glucose control are reduced at equivalently antiinflammatory doses. The mechanism underlying this selective in vitro and in vivo activity may be the result of differential cofactor recruitment in response to ligand. AL-438 reduces the interaction between GR and peroxisomal proliferator-activated receptor gamma coactivator-1, a cofactor critical for steroid-mediated glucose up-regulation, while maintaining normal interactions with GR-interacting protein 1. This compound serves as a prototype for a unique, nonsteroidal alternative to conventional GCs in treating inflammatory disease.