Glucocorticoid receptor (GR) agonist dexamethasone (Dex) induces hepatic steatosis and enhances constitutive androstane receptor (CAR) expression in the liver. CAR is known to worsen hepatic injury in nonalcoholic hepatic steatosis. Because transcription coactivator MED1/PPARBP gene is required for GR- and CAR-mediated transcriptional activation, we hypothesized that disruption of MED1/PPARBP gene in liver cells would result in the attenuation of Dex-induced hepatic steatosis. Here we show that liver-specific disruption of MED1 gene (MED1(delta Liv)) improves Dex-induced steatotic phenotype in the liver. In wild-type mice Dex induced severe hepatic steatosis and caused reduction in medium- and short-chain acyl-CoA dehydrogenases that are responsible for mitochondrial beta-oxidation. In contrast, Dex did not induce hepatic steatosis in mice conditionally null for hepatic MED1, as it failed to inhibit fatty acid oxidation enzymes in the liver. MED1(delta Liv) livers had lower levels of GR-regulated CAR mRNA compared to wild-type mouse livers. Microarray gene expression profiling showed that absence of MED1 affects the expression of the GR-regulated genes responsible for energy metabolism in the liver. These results establish that absence of MED1 in the liver diminishes Dex-induced hepatic steatosis by altering the GR- and CAR-dependent gene functions.