We developed a molecular genetic model to investigate glucocorticoid receptor (GR) signaling in human bronchial epithelial cells in response to the therapeutic steroid budesonide. Based on a genetic selection scheme using the human Chago K1 cell line and integrated copies of a glucocorticoid-responsive herpes simplex virus thymidine kinase gene and a green fluorescent protein gene, we isolated five Chago K1 variants that grew in media containing budesonide and ganciclovir. Three spontaneous budesonide-resistant subclones were found to express low levels of GR, whereas two mutants isolated from ethylmethane sulfonate-treated cultures contained normal levels of GR protein. Analysis of the GR coding sequence in the budesonide-resistant subclone Ch-BdE5 identified a novel Val to Met mutation at amino acid position 575 (GR_V575M) which caused an 80% decrease in transcriptional regulatory functions with only a minimal effect on ligand binding activity. Homology modeling of the GR structure in this region of the hormone binding domain and molecular dynamic simulations suggested that the GR_V575M mutation would have a decreased affinity for the LXXLL motif of p160 coactivators. To test this prediction, we performed transactivation and GST pull down assays using the p160 coactivator GRIP1/TIF2 and found that GR_V575M transcriptional activity was not enhanced by GRIP1 in transfected cells nor was it able to bind GRIP1 in vitro. Identification of the novel GR_V575M variant in human bronchial epithelial cells using a molecular genetic selection scheme suggests that functional assays performed in relevant cell types could identify subtle defects in GR signaling that contribute to reduced steroid-sensitivities in vivo.