Glucocorticoids play a vital role in fetal respiratory development and act via the intracellular glucocorticoid receptor (GR) to regulate transcription of key target genes. GR-null mice die at birth due to respiratory dysfunction associated with hypercellularity and atelectasis. To identify events associated with this lung phenotype we examined perinatal cellular proliferation rates and apoptotic indices. We demonstrate that compared to wild-type controls, day 18.5 postcoitum (p.c.) GR-null mouse lungs display significantly increased cell proliferation rates (1.8-fold P < 0.05) and no change in apoptosis. To examine underlying molecular mechanisms, we compared whole genome expression profiles by microarray analysis at 18.5 days p.c. Pathways relating to cell proliferation, division and cell cycle were significantly down-regulated while pathways relating to carbohydrate metabolism, kinase activities and immune responses were significantly up-regulated. Differential levels of gene expression were verified by quantitative-RT-PCR and/or Northern analysis. Key regulators of proliferation differentially expressed in the lung of 18.5 p.c. GR-null lungs included p21 CIP1 (decreased 2.9-fold, P < 0.05), a negative regulator of the cell cycle, and Mdk (increased 6.0-fold, P < 0.05), a lung growth factor. The more under-expressed genes in 18.5 p.c. GR-null lungs included Chi3l3 (11-fold, P < 0.05), a macrophage inflammatory response gene and Ela1 (9.4-fold, P < 0.05), an extracellular matrix remodeling enzyme. Our results demonstrate that GR affects the transcriptional status of a number of regulatory processes during late fetal lung development. Amongst these processes is cell proliferation whereby GR induces expression of cell cycle repressors while suppressing induction of a well characterized cell cycle stimulator.