We have studied the control of adrenal chromaffin cell development by glucocorticoids (GCs), in a reconstituted in vitro system. The development of the chromaffin phenotype involves two sequential, GC-dependent events: the decision not to become a sympathetic neuron, and the decision to express the epinephrine-synthesizing enzyme, phenylethanolamine-N-methyltransferase (PNMT). Both decisions appear to be mediated by the type II GC receptor. Competence to express PNMT develops on a schedule in vitro which parallels that seen in vivo, but only in progenitors that have first failed to undergo neuronal differentiation. The schedule of PNMT induction is thus controlled by the time of appearance of neither the inducing signal nor its receptor, as previously suggested, but rather by a cell-intrinsic timed process in chromaffin precursors. The two effects of GCs are pharmacologically distinct, suggesting that the GC receptor may interact differently with different genes in the same cell, in a manner that changes with development.