11Beta-hydroxysteroid dehydrogenase type 1 (11beta-HSD1) is essential for the local activation of glucocorticoid receptors (GR). Unlike unliganded cytoplasmic GR, 11beta-HSD1 is an endoplasmic reticulum (ER)-membrane protein with lumenal orientation. Cortisone might gain direct access to 11beta-HSD1 by free diffusion across membranes, indirectly via intracellular binding proteins or, alternatively, by insertion into membranes. Membranous cortisol, formed by 11beta-HSD1 at the ER-lumenal side, might then activate cytoplasmic GR or bind to ER-lumenal secretory proteins. Compartmentalization of 11beta-HSD1 is important for its regulation by hexose-6-phosphate dehydrogenase (H6PDH), which regenerates cofactor NADPH in the ER lumen and stimulates oxoreductase activity. ER-lumenal orientation of 11beta-HSD1 is also essential for the metabolism of the alternative substrate 7-ketocholesterol (7KC), a major cholesterol oxidation product found in atherosclerotic plaques and taken up from processed cholesterol-rich food. An 11beta-HSD1 mutant adopting cytoplasmic orientation efficiently catalyzed the oxoreduction of cortisone but not 7KC, indicating access to cortisone from both sides of the ER-membrane but to 7KC only from the lumenal side. These aspects may be relevant for understanding the physiological role of 11beta-HSD1 and for developing therapeutic interventions to control glucocorticoid reactivation.