The human glucocorticoid receptor (hGR) beta, a splicing variant of the classic receptor hGRalpha, functions as a dominant-negative inhibitor of hGRalpha. We explored the mechanism(s) underlying this effect of hGRbeta by evaluating the interactions of this isoform with known steroid receptor coactivators. We found that hGRbeta suppressed the transcriptional activity of both activation function (AF)-1 and AF-2 of hGRalpha, indicating that hGRbeta may exert its dominant-negative effect by affecting the function of coactivators that are attracted to these transactivation domains. hGRbeta bound to one of the p160 coactivators, the glucocorticoid receptor-interacting protein 1 (GRIP1) via its preserved AF-1 but not via its defective AF-2 in vitro. In a chromatin immunoprecipitation assay, hGRbeta prevented coprecipitation of GRIP1 with hGRalpha tethered to glucocorticoid response elements of the endogenous tyrosine aminotransferase promoter, whereas deletion of the AF-1 of hGRbeta abolished this effect. In further experiments, overexpression of GRIP1 attenuated the suppressive effect of hGRbeta on hGRalpha-mediated transactivation of the mouse mammary tumor virus promoter. Competition for binding to glucocorticoid response elements or heterodimerization with hGRalpha via the D loop dimerization interface occurred, but they were not necessary for the suppressive effect of hGRbeta on the transcriptional activity of hGRalpha. Our findings suggest that hGRbeta suppresses the transcriptional activity of hGRalpha by competing with hGRalpha for binding to GRIP1, and possibly other p160 coactivators, through its preserved AF-1. These findings suggest that participation of hGRbeta in the formation of a coactivator complex renders this complex ineffective.