Glucocorticoids are the most effective anti-inflammatory therapy for many chronic inflammatory and immune diseases, such as asthma, but are relatively ineffective in other diseases such as chronic obstructive pulmonary disease (COPD). Glucocorticoids suppress inflammation by several mechanisms. Glucocorticoids suppress the multiple inflammatory genes that are activated in chronic inflammatory diseases, such as asthma, by reversing histone acetylation of activated inflammatory genes through binding of liganded glucocorticoid receptors (GR) to coactivator molecules and recruitment of histone deacetylase-2 (HDAC2) to the activated transcription complex. At higher concentrations of glucocorticoids GR homodimers interact with DNA recognition sites to activate transcription through increased histone acetylation of anti-inflammatory genes and transcription of several genes linked to glucocorticoid side effects. Decreased glucocorticoid responsiveness is found in patients with severe asthma and asthmatics who smoke, as well as in all patients with COPD and cystic fibrosis. Several molecular mechanisms of glucocorticoid resistance have now been identified. HDAC2 is markedly reduced in activity and expression as a result of oxidative/nitrative stress so that inflammation becomes resistant to the anti-inflammatory actions of glucocorticoids. Dissociated glucocorticoids have been developed to reduce side effects but so far it has been difficult to dissociate anti-inflammatory effects from adverse effects. In patients with glucocorticoid resistance alternative anti-inflammatory treatments are being investigated as well as drugs that may reverse the molecular mechanism of glucocorticoid resistance.