Glucocorticoids (GC) are commonly used anti-inflammatory drugs, but long-term use can result in marked growth retardation in children due to their actions on growth plate chondrocytes. To gain an insight into the mechanisms involved in GC-induced growth retardation, we performed Affymetrix microarray analysis of the murine chondrogenic cell line ATDC5, incubated with 10^-6M dexamethasone (Dex) for 24h. Down-regulated genes included secreted frizzled-related protein and IGF-I, whilst up-regulated genes included serum/GC-regulated kinase, connective-tissue growth factor, and lipocalin 2. Lipocalin 2 expression increased by 40-fold after 24h Dex treatment. Expression increased further after 48h (75-fold) and 96h (84-fold) Dex treatment and this response was Dex concentration-dependent. Lipocalin 2 was immunolocalized to both proliferating and hypertrophic growth plate zones and its expression was increased by Dex in primary chondrocytes at 6h (3-fold, p<0.05). The lipocalin 2 response was blocked by the GC-receptor antagonist RU-486, and was increased further by the protein synthesis blocker, cycloheximide. Proliferation in lipocalin 2 over-expressing cells was less than control cells (49%, p<0.05) and over-expression caused an increase in collagen type-X expression (4-fold, p<0.05). The effects of lipocalin 2 over-expression on chondrocyte proliferation (64%, p<0.05) and collagen type-X expression (8-fold, p<0.05) were further exacerbated with the addition of 10^-6M Dex. This synergistic effect may be explained by a further increase in lipocalin 2 expression with Dex treatment of transfected cells (45%, p<0.05). These results suggest that lipocalin 2 may mediate Dex effects on chondrocytes, and provides a potential novel mechanism for GC-induced growth retardation.