In this review, we have described the function of MR and GR in hippocampal neurons. The balance in actions mediated by the two corticosteroid receptor types in these neurons appears critical for neuronal excitability, stress responsiveness, and behavioral adaptation. Dysregulation of this MR/GR balance brings neurons in a vulnerable state with consequences for regulation of the stress response and enhanced vulnerability to disease in genetically predisposed individuals. The following specific inferences can be made on the basis of the currently available facts. 1. Corticosterone binds with high affinity to MRs predominantly localized in limbic brain (hippocampus) and with a 10-fold lower affinity to GRs that are widely distributed in brain. MRs are close to saturated with low basal concentrations of corticosterone, while high corticosterone concentrations during stress occupy both MRs and GRs. 2. The neuronal effects of corticosterone, mediated by MRs and GRs, are long-lasting, site-specific, and conditional. The action depends on cellular context, which is in part determined by other signals that can activate their own transcription factors interacting with MR and GR. These interactions provide an impressive diversity and complexity to corticosteroid modulation of gene expression. 3. Conditions of predominant MR activation, i.e., at the circadian trough at rest, are associated with the maintenance of excitability so that steady excitatory inputs to the hippocampal CA1 area result in considerable excitatory hippocampal output. By contrast, additional GR activation, e.g., after acute stress, generally depresses the CA1 hippocampal output. A similar effect is seen after adrenalectomy, indicating a U-shaped dose-response dependency of these cellular responses after the exposure to corticosterone. 4. Corticosterone through GR blocks the stress-induced HPA activation in hypothalamic CRH neurons and modulates the activity of the excitatory and inhibitory neural inputs to these neurons. Limbic (e.g., hippocampal) MRs mediate the effect of corticosterone on the maintenance of basal HPA activity and are of relevance for the sensitivity or threshold of the central stress response system. How this control occurs is not known, but it probably involves a steady excitatory hippocampal output, which regulates a GABA-ergic inhibitory tone on PVN neurons. Colocalized hippocampal GRs mediate a counteracting (i.e., disinhibitory) influence. Through GRs in ascending aminergic pathways, corticosterone potentiates the effect of stressors and arousal on HPA activation. The functional interaction between these corticosteroid-responsive inputs at the level of the PVN is probably the key to understanding HPA dysregulation associated with stress-related brain disorders. 5. Fine-tuning of HPA regulation occurs through MR- and GR-mediated effects on the processing of information in higher brain structures. Under healthy conditions, hippocampal MRs are involved in processes underlying integration of sensory information, interpretation of environmental information, and execution of appropriate behavioral reactions. Activation of hippocampal GRs facilitates storage of information and promotes elimination of inadequate behavioral responses. These behavioral effects mediated by MR and GR are linked, but how they influence endocrine regulation is not well understood. 6. Dexamethasone preferentially targets the pituitary in the blockade of stress-induced HPA activation. The brain penetration of this synthetic glucocorticoid is hampered by the mdr1a P-glycoprotein in the blood-brain barrier. Administration of moderate amounts of dexamethasone partially depletes the brain of corticosterone, and this has destabilizing consequences for excitability and information processing. 7. The set points of HPA regulation and MR/GR balance are genetically programmed, but can be reset by early life experiences involving mother-infant interaction. 8. (ABSTRACT TRUNCATED)