Periplacental levels of glucocorticoid (GC) peak at parturition, and synthetic GC is administered to women at risk for preterm delivery. However, little is known concerning cell-type-specific effects of GC in placenta. Hofbauer cells (HBCs) are fetal macrophages that are located adjacent to fetal capillaries in placenta. The goal of the current study was to determine whether GC treatment altered HBC gene expression and function. Western blotting and flow cytometry revealed CD163 and folate receptor-β (FR-β), markers of antiinflammatory M2 macrophages, were specifically expressed by primary cultures of HBCs immunopurified from human term placentas. GC receptor mRNA and protein levels were higher in HBCs compared with placental fibroblasts. Treatment of HBCs with cortisol or dexamethasone (DEX) markedly and specifically enhanced CD163 protein and mRNA levels, whereas expression of FR-β and CD68 were largely unresponsive to GC treatment. DEX treatment also increased hemoglobin uptake by HBCs, evidence of enhanced HBC function. The level of CD163 mRNA, but not FR-β or CD68 mRNA, was stimulated in placental explant cultures by DEX treatment, and increased CD163/FR-β and CD163/CD68 mRNA ratios sensitively reflected the response to GC. Maternal GC administration was associated with increased CD163/FR-β and CD163/CD68 mRNA ratios in placentas from women with spontaneous preterm birth. In conclusion, in vitro studies indicated that GC treatment specifically up-regulated CD163 expression in HBCs and enhanced HBC function. In addition, the observed alterations in patterns of expression of macrophage marker genes associated with maternal GC administration suggest that HBCs are in vivo targets of GC action.