Studies in vitro and in vivo have shown that corticosteroids play an important role in bone physiology and pathophysiology. It is now established that corticosteroid hormone action is regulated, in part, at the pre-receptor level through the expression of isozymes of 11beta-hydroxysteroid dehydrogenase (11beta-HSD), which are responsible for the interconversion of hormonally active cortisol to cortisone. In this report we demonstrate 11beta-HSD activity in human osteoblast (OB) cells. Osteosarcoma-derived OB cell lines TE-85, MG-63 and SaOS-2 and fibrosarcoma Hs913T cells express the type 2 isoform of 11beta-HSD, as determined by reverse transcription polymerase chain reaction (RT-PCR) and specific enzyme assays. Enzyme activity was shown to be strictly NAD dependent with a Km of approximately 71 nM; 11beta-HSD type 1 mRNA expression and enzyme activity were not detected. All four cell lines expressed mRNA for the glucocorticoid receptor (GR) and mineralocorticoid receptor, but specific binding was only detectable with radiolabelled dexamethasone (Kd=10 nM) and not aldosterone. MG-63 cells had two to three times more GR than the other OB cells, which correlated with the higher levels of 11beta-HSD 2 activity in these cells. In contrast to the osteosarcoma cell studies, RT-PCR analysis of primary cultures of human OB cells revealed the presence of mRNA for 11beta-HSD 1 as well as 11beta-HSD 2. However, enzyme activity in these cells remained predominantly oxidative, i.e. inactivation of cortisol to cortisone (147 pmol/h per mg protein at 500 nM cortisol) was greater than cortisone to cortisol (10.3 pmol/h per mg protein at 250 nM cortisone). Data from normal human OB and osteosarcoma cells demonstrate the presence of an endogenous mechanism for inactivation of glucocorticoids in OB cells. We postulate that expression of the type 1 and type 2 isoforms of 11beta-HSD in human bone plays an important role in normal bone homeostasis, and may be implicated in the pathogenesis of steroid-induced osteoporosis.