Cytokine-stimulated inducible nitric oxide synthase (iNOS) gene expression is dependent on nuclear factor-kappa B (NF-kappa B) activation and is suppressed by glucocorticoids (GC). In this study we examined the molecular mechanisms of GC inhibition of iNOS expression in rat hepatocytes. Combinations of tumor necrosis factor-alpha, interleukin-1 beta, and interferon-gamma (cytokine mixture CM) induced high levels of iNOS mRNA and NO synthesis. The synthetic GC dexamethasone markedly repressed iNOS mRNA and protein expression, and nuclear run-on assays showed that this inhibition was occurring at the level of transcription. In addition, transfection studies showed that CM-stimulated activity of a 1.6-kb murine iNOS promoter fragment linked upstream of luciferase was suppressed by dexamethasone. Electromobility shift assays demonstrated that CM induced the appearance of an NF-kappa B complex composed of p50 and p65 subunits; the addition of dexamethasone markedly decreased this band shift. I-kappa B alpha expression was decreased by CM and upregulated in the presence of dexamethasone. Subsequently, nuclear p65 levels were decreased by dexamethasone compared with CM-treated cells. Thus GC repress NF-kappa B DNA-binding activity in rat hepatocytes in part through the upregulation of its inhibitor I-kappa B alpha. These data indicate that one mechanism by which GC block iNOS expression is through the inhibition of NF-kappa B activation resulting in decreased iNOS transcription.