We have used transient interspecies heterokaryons to analyze nucleocytoplasmic shuttling of glucocorticoid receptor (GR) and demonstrated that receptors that accumulate within nuclei upon ligand binding are not statically confined to that compartment, but rather have the capacity to reversibly transverse the nuclear envelope. The ability of various GR mutants to shuttle between nuclei of heterokaryons excluded transcriptional activation and DNA binding as prerequisites for nucleocytoplasmic shuttling of GR. However, a constitutively nuclear GR derivative that has fused at its amino terminus the simian virus 40 large tumor antigen nuclear localization signal sequence was unable to efficiently export from nuclei unless ligand-bound. These results uncover an unexpected effect of ligand binding to GR--i.e., the overriding of a dominant negative effect on nuclear export of a heterologous nuclear import signal sequence. Furthermore, they demonstrate that a nuclear import signal sequence can influence nuclear processing pathways that culminate in efficient nuclear export.