The Bcl-2 associated athanogene 1M (Bag-1M) is known to repress the transactivation of the glucocorticoid receptor (GR). We report here that Bag-1M inhibits the action of GR via recruitment of corepressors, including nuclear receptor corepressor (NcoR) and silencing mediator for retinoic acid and thyroid hormone receptor (SMRT), and histone deacetylase (HDAC)3 to the genomic response element of a glucocorticoid-regulated human metallothionein IIa (hMTIIa) gene. A mutant GR lacking the interaction with BAG-1M fails to recruit the corepressors NcoR and SMRT. RNAi-mediated knock down of corepressors and the use of HDAC inhibitor relieved Bag-1M-induced repression on the transactivation of the GR. In addition, Bag-1M is not involved in the degradation of the receptor. These findings indicate a novel mechanism by which Bag-1M acts as a corepressor and downregulates the activity of the GR.