The ubiquitin-proteasome pathway regulates the turnover of many transcription factors, including steroid hormone receptors such as the estrogen receptor and progesterone receptor. For these receptors, proteasome inhibition interferes with steroid-mediated transcription. We show here that proteasome inhibition with MG132 results in increased accumulation of the glucocorticoid receptor (GR), confirming that it is likewise a substrate for the ubiquitin-proteasome degradative pathway. Using the mouse mammary tumor virus (MMTV) promoter integrated into tissue culture cells, we found that proteasome inhibition synergistically increases GR-mediated transactivation. This increased activation was observed in a number of cell lines and on various MMTV templates, either as transiently transfected reporters or stably integrated into chromatin. These observations suggest that the increase in GR-mediated transcription due to proteasome inhibition may occur downstream of the initial chromatin remodeling step. In support of this concept, the increase in transcription did not correlate with an increase in chromatin remodeling, as measured by restriction enzyme hypersensitivity, or transcription factor loading, as exemplified by nuclear factor 1. To investigate the relationship between GR turnover, transcription, and subnuclear trafficking, we examined the effect of proteasome inhibition on the mobility of the GR within the nucleus and association of the GR with the nuclear matrix. Blocking GR turnover reduced the mobility of the GR within the nucleus, and this correlated with increased association of the receptor with the nuclear matrix. As a result of proteasome inhibition, GR mobility within the nucleus was reduced while its association with the nuclear matrix was increased. Thus, while altered nuclear mobility of steroid receptors may be a common feature of proteasome inhibition, GR is unique in its enhanced transactivation activity that results when proteasome function is compromised. Proteasomes may therefore impact steroid receptor action at multiple levels and exert distinct effects on individual receptor types.