The HEXIM1 protein has been shown to form a protein-RNA complex composed of 7SK small nuclear RNA and positive transcription elongation factor b (P-TEFb), which is composed of cyclin-dependent kinase 9 (CDK9) and cyclin T1, and to inhibit the kinase activity of CDK9, thereby suppressing RNA polymerase II-dependent transcriptional elongation. Here, we biochemically demonstrate that HEXIM1 forms a distinct complex with glucocorticoid receptor (GR) without RNA, CDK9, or cyclin T1. HEXIM1, through its arginine-rich nuclear localization signal, directly associates with the ligand-binding domain of GR. Introduction of HEXIM1 short interfering RNA and adenovirus-mediated exogenous expression of HEXIM1 positively and negatively modulated glucocorticoid-responsive gene activation, respectively. In the nucleus, HEXIM1 was shown to localize in a distinct compartment from that of the p160 coactivator transcriptional intermediary factor 2. Overexpression of HEXIM1 decreased ligand-dependent association between GR and transcriptional intermediary factor 2. Antisense-mediated disruption of 7SK blunted the negative effect of HEXIM1 on arylhydrocarbon receptor-dependent transcription but not on GR-mediated one, indicating that a class of transcription factors are direct targets of HEXIM1. These results indicate that HEXIM1 has dual roles in transcriptional regulation: inhibition of transcriptional elongation dependent on 7SK RNA and positive transcription elongation factor b and interference with the sequence-specific transcription factor GR via a direct protein-protein interaction. Moreover, the fact that the central nuclear localization signal of HEXIM1 is essential for both of these actions may argue the crosstalk of these functions.