Glucocorticoids (GC) are universally accepted agents for the treatment of anti-inflammatory and immunosuppressive disorders. They are used in the treatment of rheumatic diseases and various inflammatory diseases such as allergy, asthma and sepsis. They bind with GC receptor (GR) and form GC-GR complex with the receptor and exert their actions. On activation the GC-GR complex up-regulates the expression of nucleus anti-inflammatory proteins called as transactivation and down-regulates the expression of cytoplasmic pro-inflammatory proteins called as transrepression. It has been observed that transactivation mechanisms are notorious for side effects and transrepressive mechanisms are identified for beneficial anti-inflammatory effects of GC therapy. GC hampers the function of numerous inflammatory mediators such as cytokines, chemokines, adhesion molecules, arachidonic acid metabolites, release of platelet-activating factor (PAF), inflammatory peptides and enzyme modulation involved in the process of inflammation. The GC resistance is a serious therapeutic problem and limits the therapeutic response of GC in chronic inflammatory patients. It has been observed that the GC resistance can be attributed to cellular microenvironment changes, as a consequence of chronic inflammation. Various other factors responsible for resistance have been identified, including alterations in both GR-dependent and GR-independent signaling pathways of cytokine action, hypoxia, oxidative stress, allergen exposure and serum-derived factors. The present review enumerates various aspects of inflammation such as use of GC for treatment of inflammation and its mechanism of action. Molecular mechanisms of anti-inflammatory action of GC and GC resistance, alternative anti-inflammatory treatments and new strategy for reversing the GC resistance have also been discussed.