The T47D (A1-2) cell line is a human mammary carcinoma-derived cell line that has been engineered to constitutively express comparable levels of both glucocorticoid and progesterone receptors. In addition, these cells possess a stably integrated mouse mammary tumor virus (MMTV) luciferase reporter gene. Because the MMTV promoter is recognized similarly by both receptors, we have used this cell line to examine the transcriptional regulatory mechanisms employed by the two receptors. The stably integrated MMTV luciferase gene is highly inducible by glucocorticoids, whereas it is almost entirely refractory to induction by progestins. In contrast, a transiently transfected MMTV chloroamphenicol acetyl transferase reporter, while much more inducible by glucocorticoids, can be induced significantly by progestins. The differential inducibility of the stably integrated template is reflected in the superior ability of glucocorticoids to initiate alterations in the chromatin structure of the promoter. Concomitant with the changes in nuclease accessibility, glucocorticoids, unlike progestins, recruit transcription factors to the MMTV promoter. These results emphasize a central role for the modulation of the chromatin environment by steroid receptors in defining their capacity to regulate gene expression in vivo.