The role of the glucocorticoid receptor (GR) in glucocorticoid physiology and during development was investigated by generation of GR-deficient mice by gene targeting. GR -/- mice die within a few hours after birth because of respiratory failure. The lungs at birth are severely atelectatic, and development is impaired from day 15.5 p.c. Newborn livers have a reduced capacity to activate genes for key gluconeogenic enzymes. Feedback regulation via the hypothalamic-pituitary-adrenal axis is severely impaired resulting in elevated levels of plasma adrenocorticotrophic hormone (15-fold) and plasma corticosterone (2.5-fold). Accordingly, adrenal glands are enlarged because of hypertrophy of the cortex, resulting in increased expression of key cortical steroid biosynthetic enzymes, such as side-chain cleavage enzyme, steroid 11 beta-hydroxylase, and aldosterone synthase. Adrenal glands lack a central medulla and synthesize no adrenaline. They contain no adrenergic chromaffin cells and only scattered noradrenergic chromaffin cells even when analyzed from the earliest stages of medulla development. These results suggest that the adrenal medulla may be formed from two different cell populations: adrenergic-specific cells that require glucocorticoids for proliferation and/or survival, and a smaller noradrenergic population that differentiates normally in the absence of glucocorticoid signaling.