The glucocorticoid receptor (GR) has been shown to undergo hormone-dependent down-regulation via transcriptional, post-transcriptional, and posttranslational mechanisms. However, the mechanisms involved in modulating GR levels in the absence of hormone remain enigmatic. Here we demonstrate that TSG101, a previously identified GR-interacting protein, stabilizes the hypophosphorylated form of GR in the absence of ligand. We found that a non-phosphorylated version of GR (S203A/S211A) showed enhanced interaction with TSG101 as compared with the wild type GR, suggesting that TSG101 interacts more favorably with GR when it is not phosphorylated. A significant accumulation of GR S203A/S211A protein is detected in the absence of ligand when TSG101 is overexpressed, whereas no increase in the wild type phosphorylated GR or phosphomimetic GR S203E/S211E was observed in mammalian cells. In contrast, down-regulation of TSG101 expression by siRNA renders the hypophosphorylated form of GR unstable. We further show that TSG101 stabilizes GR by impeding its degradation by the proteasome and extending receptor half-life. Thus, in absence of a ligand, TSG101 binds GR and protects the non-phosphorylated receptor from degradation.