Extraction of rat liver cytosol with 10% charcoal at 4 degrees C inactivates specific glucocorticoid-binding capacity. The steroid-binding capacity of extracted cytosol can be restored by adding dithiothreitol or by incubating with boiled liver cytosol at 20 degrees C in the presence of 10 mM sodium molybdate. Two components of boiled cytosol are required for receptor activation: NADPH and an endogenous heat-stable protein with an apparent Mr of 12,300 by Sephadex G-50 chromatography. This endogenous receptor-activating protein coelutes on Sephadex G-50 chromatography with endogenous thioredoxin activity, and it can be replaced in the activating system by purified Escherichia coli thioredoxin. These observations suggest that glucocorticoid receptors in cytosol preparations are maintained in a reduced, steroid-binding state by a NADPH-dependent, thioredoxin-mediated reducing system.