To investigate the role of acidic and phosphorylated amino acids in the function of the major transactivation domain (tau(1)) of the glucocorticoid receptor, we have performed a mutagenesis study. Aspartic and glutamic acid residues were neutralized in clusters of 2 to 4 amino acids throughout the tau(1) domain. The activity of the mutant proteins was determined using transactivation as says in yeast and mammalian cells. Some acidic residues in the core region of tau(1) appear to play a minor role in tau(1) activity, but, generally, individual acidic residues are not critical for activity. Mutagenesis of five serine residues that are phosphorylated in the mouse glucocorticoid receptor and which are conserved in the human receptor did not affect the transactivation activity of the tau(1) domain in yeast. As in mouse cells, these serine residues are the predominant sites of phosphorylation for ectopically expressed receptor in yeast, since the mutant protein lacking all five sites had a severely reduced phosphorylation level. Mutant proteins in which larger numbers of acidic residues are neutralized show a progressive decrease in activity indicating that acidity in general is important for tau(1) function. However, our results are not consistent with the ''acid blob'' theory of transactivator function that has been suggested for some other activator proteins. Other putative roles for the acidity of tau(1) are discussed.