Compound A (CpdA), a dissociated glucocorticoid receptor modulator, decreases corticosteroid-binding globulin (CBG), adrenocorticotropic hormone (ACTH), and luteneinizing hormone levels in rats. Whether this is due to transcriptional regulation by CpdA is not known. Using promoter reporter assays we show that CpdA, like dexamethasone (Dex), directly transrepresses these genes. Results using a rat Cbg proximal-promoter reporter construct in BWTG3 and HepG2 cell lines support a glucocorticoid receptor (GR)-dependent transrepression mechanism for CpdA. However, CpdA, unlike Dex, does not result in transactivation via glucocorticoid-responsive elements within a promoter reporter construct even when GR is co-transfected. The inability of CpdA to result in transactivation via glucocorticoid-responsive elements is confirmed on the endogenous tyrosine aminotransferase gene, whereas transrepression ability is confirmed on the endogenous CBG gene. Consistent with a role for CpdA in modulating GR activity, whole cell binding assays revealed that CpdA binds reversibly to the GR, but with lower affinity than Dex, and influences association of [(3)H]Dex, but has no effect on dissociation. In addition, like Dex, CpdA causes nuclear translocation of the GR, albeit to a lesser degree. Several lines of evidence, including fluorescence resonance energy transfer, co-immunoprecipitation, and nuclear immunofluorescence studies of nuclear localization-deficient GR show that CpdA, unlike Dex, does not elicit ligand-induced GR dimerization. Comparison of the behavior of CpdA in the presence of wild type GR to that of Dex with a dimerization-deficient GR mutant (GR(dim)) strongly supports the conclusion that loss of dimerization is responsible for the dissociated behavior of CpdA.