Glucocorticoids inhibit the synthesis of insulin-like growth factor-binding protein-5 (IGFBP-5) in osteoblasts, but the mechanisms involved are unknown. IGFBP-5 stimulates bone cell growth, and its inhibition by glucocorticoids may be relevant to the action of this binding protein on bone formation. We tested the effects of cortisol on IGFBP-5 expression in cultures of osteoblast-enriched cells from fetal rat calvariae (Ob cells). Cortisol decreased IGFBP-5 polypeptide levels in the extracellular matrix and caused a time- and dose-dependent decrease in IGFBP-5 mRNA. IGFBP-5 transcripts were markedly decreased by cycloheximide, and further suppressive effects of cortisol could not be determined. Cortisol did not modify the decay of IGFBP-5 mRNA in transcriptionally arrested Ob cells. Cortisol decreased IGFBP-5 hnRNA, the rate of IGFBP-5 transcription, and the activity of the murine IGFBP-5 promoter by 35% in transient transfection experiments. Deletion analysis showed that the region responsive to cortisol is from base pairs -70 to +22, and E-box-binding proteins or c-Myb-related nuclear factors may be involved in its regulation. In conclusion, cortisol inhibits IGFBP-5 transcription in Ob cells through the Myb-binding domain. This effect may be partly responsible for the effect of glucocorticoids on bone formation.