By repressing inflammatory gene expression, glucocorticoids are the most effective treatment for chronic inflammatory diseases such as asthma. However, in some patients with severe disease, or who smoke or suffer from chronic obstructive pulmonary disease, glucocorticoids are poorly effective. Although many investigators focus on defects in the repression of inflammatory gene expression, glucocorticoids also induce (transactivate) the expression of numerous genes to elicit anti-inflammatory effects. Using human bronchial epithelial (BEAS-2B) and pulmonary (A549) cells, we show that cytokines [tumor necrosis factor α (TNFα) and interleukin 1β], mitogens [fetal calf serum (FCS) and phorbol ester], cigarette smoke, and a G(q)-linked G protein-coupled receptor agonist attenuate simple glucocorticoid response element (GRE)-dependent transcription. With TNFα and FCS, this effect was not overcome by increasing concentrations of dexamethasone, budesonide, or fluticasone propionate. Thus, the maximal ability of the glucocorticoid to promote GRE-dependent transcription was reduced, and this was shown additionally for the glucocorticoid-induced gene p57(KIP2). The long-acting β(2)-adrenoceptor agonists (LABAs) formoterol fumarate and salmeterol xinafoate enhanced simple GRE-dependent transcription to a level that could not be achieved by glucocorticoid alone. In the presence of TNFα or FCS, which repressed glucocorticoid responsiveness, these LABAs restored glucocorticoid-dependent transcription to levels that were achieved by glucocorticoid alone. Given the existence of genes, such as p57(KIP2), which may mediate anti-inflammatory actions of glucocorticoids, we propose that repression of transactivation represents a mechanism for glucocorticoid resistance and for understanding the clinical benefit of LABAs as an add-on therapy in asthma and chronic obstructive pulmonary disease.