The effect of dexamethasone on astrocyte differentiation was investigated in vitro, using cultures of normal and transformed astrocytes. The astrocyte-enriched proteins glutamine synthetase (GS) and glial fibrillary acidic (GFA) protein were used as markers of astrocyte differentiation. Ethanol, the vehicle for dexamethasone, decreases GS activity and increases GFA protein concentration in cultures of the established cell line U251MG and in the majority of cultures of transformed astrocytes derived from varying grades of astrocytoma. Ethanol has no effect on primary cultures of astrocytes derived from immature rat brain. Dexamethasone increases GS activity and decreases GFA protein concentration in cultures of U251MG and a grade IV astrocytoma-derived culture, in comparison with ethanol control. Our results show differential effects of two factors on cell-specific proteins in normal and transformed astrocytes.