Glucocorticoids have profound effects on bone formation, decreasing IGF I transcription in osteoblasts, but the mechanisms involved are poorly understood. We previously showed that the bp +34 to +192 region of the rat IGF I exon I promoter was responsible for repression of IGF I transcription by cortisol in cultures of osteoblasts from fetal rat calvariae (Ob cells). Here, site-directed mutagenesis was used to show that a binding site for members of the CAAT/enhancer binding protein family of transcription factors, within the +132 to +158 region of the promoter, mediates this glucocorticoid effect. EMSAs demonstrated that cortisol increased binding of osteoblast nuclear proteins to the +132 to +158 region of the IGF I promoter. Supershift assays showed that CAAT/enhancer binding protein alpha, beta, and delta interact with this sequence, and binding of CAAT/enhancer binding protein delta, in particular, was increased in the presence of cortisol. Northern blot analysis showed that CAAT/enhancer binding protein delta and beta transcripts were increased by cortisol in Ob cells. Further, cortisol increased the transcription of these genes and increased the stability of CAAT/enhancer binding protein delta mRNA. In conclusion, cortisol represses IGF I transcription in osteoblasts, and CAAT/enhancer binding proteins appear to play a role in this effect.