The steroid-binding domain of the human glucocorticoid receptor has a dominant, negative influence over the activity of the remainder of the molecule. We have determined sequences within this domain that are responsible for this inhibition by creating truncations and internal deletions which remove part or all of the ligand-binding domain. Two apparently unrelated sequences within this region are shown to block the ability to stimulate transcription when fused to the carboxyl terminus of a functional, hormone-independent receptor derivative. These results support the possibility of two distinct protein-binding sites within the steroid-binding domain.