Dexamethasone and other glucocorticoids suppress FcepsilonRI-mediated release of inflammatory mediators from mast cells. Suppression of cytokine production is attributed to repression of cytokine gene transcription but no mechanism has been described for the suppression of degranulation. We show that therapeutic concentrations of dexamethasone inhibit intermediate signaling events, in particular the activation of phosphatidylinositol (PI)3-kinase and downstream signaling events that lead to degranulation in rat basophilic leukemia 2H3 cells. This inhibitory action is mediated via the glucocorticoid receptor and is not apparent when cells are stimulated via Kit in a mouse bone marrow-derived mast cell line. The primary perturbation appears to be the failure of the regulatory p85 subunit of PI3-kinase to engage with the adaptor protein Grb2-associated binder 2 leading to suppression of phosphorylation of phospholipase Cgamma2, the calcium signal, and degranulation. Suppression of PI3-kinase activation by dexamethasone may also contribute to reduced cytokine production because the PI3-kinase inhibitor LY294002, like dexamethasone, inhibits Ag-induced transcription of cytokine genes as well as degranulation.