Steroid receptors are a class of molecules that function as both signal transducers and transcription factors. From cloned sequences it is apparent that steroid receptors and other transcription factors belong to a superfamily of proteins that appear to function by similar mechanisms. Functional domains for hormone and DNA binding, and for transcriptional activation, have been defined for several receptors. In some cases, specific amino acids required for function have been identified. The multi-functional steroid receptor molecules are modular in nature in that domains function independently of structural position in receptor molecules and can even function after insertion into unrelated transactivation proteins. The mechanism of receptor action is complex and multistage and a number of unanswered questions remain to be defined. Receptors are inactive in the absence of hormone in vivo; the proposed components of this inactive complex include several proteins and RNA. Theories on the physiological role of HSP 90 in this complex range from an artifactual interaction to an absolute conformational requirement for hormone binding. Although its function has not been demonstrated clearly yet, there is a consensus that one major function is to inactivate receptor by blocking DNA binding. Most of the steroid receptors appear to be nuclear in the absence of hormone. The transformation process produces a receptor molecule that is capable of specific DNA binding and transcriptional activation. The specificity of DNA binding is conferred by as few as three amino acids in the first finger of the C1 region. Receptors appear to bind to DNA as dimers although whether dimers are preformed in cytoplasm remains unknown. Although the DNA binding domain is required for gene activation, other regions of the molecule in the carboxyl and amino terminus enhance activation function. Important interactions of steroid receptors with other receptors and unrelated transcription factors has been proposed and most certainly occurs. Finally, posttranslational modifications such as phosphorylation have been postulated to modulate several functional properties of steroid receptors.