11beta-Hydroxysteroid dehydrogenase 1 (11beta-HSD1) is primarily responsible for intracellular biosynthesis of active glucocorticoid, and its tissue-specific dysregulation has been implicated in the development of metabolic syndromes. We have developed a cell-based assay for measuring 11beta-HSD1 activities using murine skeletal muscle cell line C2C12. We found that the messenger RNA (mRNA) expression of 11beta-HSD1 increased on differentiation with enhanced enzyme activity as determined by homogeneous time-resolved fluorescence (HTRF) assay. Carbenoxolone, a well-known 11beta-HSD1 inhibitor, exhibited an IC(50) value similar to that in in vitro microsomal assay (IC(50) = 0.3 microM). Unlike in vitro microsomal assay, cosubstrate NADPH was not required in the cell-based assay, indicating that viable cells might provide a sufficient amount of endogenous NADPH to catalyze the enzymatic conversion of inactive cortisone to active cortisol. Treatment of C2C12 myotubes with cortisone concentration dependently transactivated and transrepressed glutamine synthase and interleukin-6, respectively, which were abrogated by carbenoxolone or RU-486 (mifepristone), a glucocorticoid receptor antagonist. Accordingly, a newly designed cell-based assay using differentiated skeletal muscle cells would be useful for high-throughput screening of 11beta-HSD1 inhibitors as well as for understanding the molecular mechanisms of glucocorticoid action.