11 beta -Hydroxysteroid dehydrogenase (11 beta -HSD) type 2 has been considered to protect the mineralocorticoid receptor (MR) by converting 11 beta -hydroxyglucocorticoids into their inactive 11-keto forms, thereby providing specificity to the TMR for aldosterone. To investigate the functional protection of the MR by 11 beta -HSD2, we coexpressed epitope-tagged MR and 11 beta -HSD2 in HEK-293 cells lacking 11 beta -HSD2 activity and analyzed their subcellular localization by fluorescence microscopy. When expressed alone in the absence of hormones, the MR was both cytoplasmic and nuclear. However, when coexpressed with 11 beta -HSD2, the MR displayed a reticular distribution pattern, suggesting association with 11 beta -HSD2 at the endoplasmic reticulum membrane. The endoplasmic reticulim membrane localization of the AM was observed upon coexpression only with 11 beta -HSD2, but not with 11 beta -HSD1 or other steroid-metabolizing enzymes. Aldosterone induced rapid nuclear translocation of the AM whereas moderate cortisol concentrations (10-200 nM) did not activate the, receptor, due to 11 beta -HSD2-dependent oxidation to cortisone. Compromised 11 beta -HSD2 activity (due to genetic mutations, the presence of inhibitors, or saturating cortisol concentrations) led to cortisol-induced nuclear accumulation of the MR. Surprisingly, the 11 beta -HSD2 product cortisone blocked the aldosterone-induced MR activation by a strictly 11 beta -HSD2-dependent mechanism. Our results provide evidence that 11 beta -HSD2, besides inactivating 11 beta -hydroxyglucocorticoids, functionally interacts with the MR and directly regulates the magnitude of aldosterone-induced MR activation.