The C6 rat glioma cell line is responsive to glucocorticoid hormones. C6 variants that are hyper-responsive (ST1) and resistant (P7) to hormone treatment have been derived previously. Glucocorticoid treatment of ST1 cells leads to complete reversion of the transformed phenotype and loss of tumorigenic potential. Production of C type retrovirus particles is also induced by glucocorticoids in ST1 cells. Cloning of the genes regulated by glucocorticoids in this cell system was used here as a strategy to uncover the gene products involved in the transformed-to-normal phenotypic change. Construction of a cDNA library from glucocorticoid-treated ST1 cells and screening by differential hybridization resulted in the isolation of three cellular sequences that code for rat metallothioneins (C27 and C41) and α1-acid glycoprotein (C36). Northern blot analysis revealed that expression of these genes was dramatically induced by hydrocortisone in ST1 but not in P7 cells. Viral genomic RNA was used to isolate and characterize retrovirus-related sequences that could also be responsible for the phenotypic reversion phenomenon.