Since their discovery in 1948, glucocorticoids have been widely used clinically to treat inflammatory disorders like rheumatoid arthritis. However, their usefulness, especially in rheumatoid arthritis therapy, is hampered by severe side effects on bone leading to glucocorticoid-induced osteoporosis. The molecular and cellular mechanisms mediating the beneficial and adverse effects remain poorly understood. Nevertheless, advanced molecular biological analyses and in vivo approaches using conditional mutant mice have helped to unravel in part the underlying mechanisms of immunosuppression and side effects of glucocorticoid therapy in arthritis, thereby contributing to an improved understanding of these therapeutically important hormones.