Activation of glucocorticoid receptor (GR) induces a reduction of adult hippocampal neurogenesis found in dentate gyrus (DG). However, the nature of specific effects by glucocorticoid in hippocampal neurogenesis is not known. In this report, we show differential effects of dexamethasone (DEX), a glucocorticoid receptor agonist, on proliferation and functional differentiation of adult hippocampal progenitor cells in DG. Two-month-old adult rats received daily injections of DEX for 9 days and were sacrificed 12 h and 28 days after the ninth injection. Proliferation assays showed that DEX inhibited proliferation of neural progenitor cells and the inhibitory effects of DEX was not detected 28 days after recovery. Functional differentiation studies using B-cell lymphoma protein-2 (Bcl-2), brain-derived neurotrophic factor (BDNF), p-ERK, and neuronal nuclear protein (NeuN) antibodies revealed that the expressions of Bcl-2 and BDNF were not significantly different between control and DEX-treated rats. In contrast, however, the activation of extracellular signal-regulated kinase (ERK) was downregulated 12 h, but not 28 days, after the DEX treatment. When adult hippocampal progenitor cell cultures were treated with subchronic DEX, proliferation of the progenitor cells was suppressed. Taken these in vitro and in vivo results together, it is concluded that glucocorticoid receptor activation blocks only proliferation, but not differentiation, in hippocampal neurogenesis.