Corticosteroids can influence brain function, and glucocorticoid hormone receptors (GRs) are present in brain tissue. We observed that GR and also mineralocorticoid receptor (MR) are expressed by embryonic rat neural stem cells (NSCs). NSCs in developing ventricular epithelium were positive for GR. Stimulation of cultured NSCs with the specific receptor ligands dexamethasone and corticosterone reduced cell proliferation, shown by 5'-bromo-2-deoxy-uridine labeling. The effect of the hormones was dose dependent and inhibited by the GR blocker mifepristone but not by spironolactone, blocking MR. Dexamethasone inhibited the cell cycle by decreasing the levels of cyclin D1 in NSCs. The hormone-induced decline was inhibited by MG132 (benzyloxycarbonyl-leucyl-leucyl-leucinal), showing an involvement of the ubiquitin proteasome system, In keeping with this, dexamethasone increased the ubiquitination of cyclin D1. In embryonic brain, dexamethasone inhibited cell proliferation of NSCs. This demonstrates that embryonic NSCs are critically influenced by glucocorticoids, which can have long-term effects in the brain.