We used a cellular system to elucidate the molecular determinants of the large immunophilin FK506-binding proteins (FKBP)51 and -52 for their action on the glucocorticoid receptor in mammalian cells. Increasing the levels of FKBP51 reduced the transcriptional activity of the receptor, as reported. Elevated levels of FKBP52 per se showed no effect but mitigated the inhibition of the receptor induced by FKBP51. We discovered that nuclear translocation of the glucocorticoid receptor was delayed by FKBP51. This correlates with the reduced interaction of FKBP51 with the motor protein dynein compared with FKBP52. From mutational analyses, we concluded that three features of the immunophilins are required for efficient receptor signaling in mammalian cells: hsp90 interaction, dynein association, and peptidylprolyl isomerase (PPIase) enzyme activity. The relevance of dynein for receptor function was substantiated by several experiments: 1) coexpression of dynamitin, which disrupts the transport complex and reduces receptor activity; 2) coexpression of the PPIase domain fragment of FKBP52, which is known to disrupt interaction of the receptor to dynein and reduce glucocorticoid receptor function, in contrast to the corresponding fragment of FKBP51; and 3) swapping of the PPIase domains FKBP51 and FKBP52, which reverses the respective activity. We concluded from our results that the mechanisms of the regulatory system FKBP51/FKBP52 discovered in yeast also operate in mammals to modulate hormone binding of the receptor. In addition, differential regulation of dynein association and nuclear translocation contributes to the effects of the two immunophilins on the glucocorticoid receptor in mammals.