Many of the therapeutic effects of systemic and inhaled corticosteroids can be explained by their ability to modulate immune responses. T lymphocytes in particular have been used to establish some of the key paradigms by which corticosteroids inhibit cell activation and gene expression, and there is now substantial evidence that inhaled corticosteroids potently suppress pulmonary immune responses driven by T-helper cells. Inhaled corticosteroids work in part by suppressing T-cell homing to the lung, but they also inhibit T-cell activation within the airways. This article reviews the mechanisms by which inhaled corticosteroids inhibit T-cell homing and activation, including the transcriptional pathways targeted by corticosteroids and the glucocorticoid receptor in T cells. Emerging data point to dendritic cells (DCs) as another cellular target of corticosteroids in the lung. DCs are a key component of the innate immune system, and subtle differences in DC maturation can qualitatively alter T-cell activation and a subsequent immune response. Thus, this article also reviews the mechanisms of DC maturation and DC:T cell cross-talk, including new evidence that corticosteroids might act at this level to inhibit antigen-specific immunity.