Cartilage and bone are severely affected by glucocorticoids (GCs), steroid hormones that are frequently used to treat inflammatory diseases. Major complications associated with long-term steroid therapy include impairment of cartilaginous bone growth and GC-induced osteoporosis. Particularly in arthritis, GC application can increase joint and bone damage. Contrarily, endogenous GC release supports cartilage and bone integrity. In the last decade, substantial progress in the understanding of the molecular mechanisms of GC action has been gained through genome-wide binding studies of the GC receptor. These genomic approaches have revolutionized our understanding of gene regulation by ligand-induced transcription factors in general. Furthermore, specific inactivation of GC signaling and the GC receptor in bone and cartilage cells of rodent models has enabled the cell-specific effects of GCs in normal tissue homeostasis, inflammatory bone diseases, and GC-induced osteoporosis to be dissected. In this review, we summarize the current view of GC action in cartilage and bone. We further discuss future research directions in the context of new concepts for optimized steroid therapies with less detrimental effects on bone.