It is well known that the process of branching morphogenesis requires epithelial-mesenchymal interactions. One outstanding model for the study of tissue interactions during branching morphogenesis is the embryonic mouse submandibular gland (SMG). Although it has been clearly demonstrated that the branching pattern is dependent on interactions between the epithelium and the surrounding mesenchyme, little is known about the molecular mechanism underlying the branching process. One group of transcription factors that likely participates in the control of epithelial-mesenchymal inductive interactions are the Msx-class of homeodomain-containing proteins. In this paper, we focus on Msx-2 because its developmental expression is correlated with inductive interactions, suggesting that Msx-2 may play a functional role during cell-cell interactions. We demonstrate the expression of Msx-2 mRNA and protein to be primarily in the branching epithelia with progressive embryonic (E13 to E15) SMG development and, to a lesser extent, in the mesenchyme. We also show that Msx-2 is expressed by embryonic SMG primordia cultured under defined conditions. In addition, to begin to delineate a functional role for Msx-2, we employed an experimental strategy by using exogenous glucocorticoid (CORT) treatment of embryonic SMGs in vitro and in vivo to significantly enhance branching morphogenesis and evaluate the effect of CORT treatment on embryonic SMG Msx-2 expression. A marked increase in Msx-2 transcripts and protein is detected with in vitro and in vivo CORT treatment. Our studies indicate that one mechanism of CORT regulation of salivary gland morphogenesis is likely through the modulation of Msx-2 gene expression.