OBJECTIVE: Glucocorticoids (GCs) are indicated for a number of conditions in obstetrics and perinatal medicine; however, the neurodevelopmental and long-term neurological consequences of early-life GC exposure are still largely unknown. Preclinical studies have demonstrated that GCs have a major influence on hippocampal cell turnover by inhibiting neurogenesis and stimulating apoptosis of mature neurons. Here we examined the fate of the limited pool of neural progenitor cells (NPCs) after GC administration during neonatal development; the impact of this treatment on hippocampal structure was also studied. METHODS: Phenotype-specific genetic and antigenic markers were used to identify cultured NPCs at various developmental stages; the survival of these cells was monitored after exposure to the synthetic glucocorticoid dexamethasone (DEX). In addition, the effects of neonatal DEX treatment on the neurogenic potential of the rat hippocampus were examined by monitoring the incorporation of bromodeoxyuridine and expression of Ki67 antigen at various postnatal ages. RESULTS: Multipotent nestin-expressing NPCs and Talpha1-tubulin-expressing immature neurons succumb to GC-induced apoptosis in primary hippocampal cultures. Neonatal GC treatment results in marked apoptosis among the proliferating population of cells in the dentate gyrus, depletes the NPC pool, and leads to significant and sustained reductions in the volume of the dentate gyrus. INTERPRETATION: Both NPCs and immature neurons in the hippocampus are sensitive to the proapoptotic actions of GCs. Depletion of the limited NPC pool during early life retards hippocampal growth, thus allowing predictions about the potential neurological and psychiatric consequences of neonatal GC exposure.