Exposure of H-4-IIE-C3 rat hepatoma cell cultures to the synthetic glucocorticoid, dexamethasone, results in an inhibition of cellular proliferation which is not the result of steroid-induced cytolysis. A significant decrease in both the rate of DNA synthesis and DNA content precedes a detectable effect on cell number. Continuous culture of H-IIE-C3 cells in medium containing 10(-5) M dexamethasone results in the selection of a steroid-resistant cell population that has the growth characteristics of unselected sensitive cultures and shows normal steroid induction of tryosine transaminase. Selection is a slow process requiring 24 to 36 months to obtain a phenotypically stable resistant cell line, and can be subdivided into three phases--a sensitive phase, adaptation and resistance. A comparison of the karyotypes of unselected and resistant cultures shows that the selection process enriches for a dexamethasone-resistant subpopulation.