To find novel components in the glucocorticoid signal transduction pathway, we performed a yeast genetic screen to identify ligand-effect modulators (LEMs), proteins that modulate the cellular response to hormone. We isolated several mutants that conferred increased glucocorticoid receptor (GR) activity in response to dexamethasone and analyzed two of them in detail. These studies identify two genes, LEM3 and LEM4, which correspond to YNL323w and ERG6, respectively. LEM3 is a putative transmembrane protein of unknown function, and ERG6 is a methyltransferase in the ergosterol biosynthetic pathway. Analysis of null mutants indicates that LEM3 and ERG6 act at different steps in the GR signal transduction pathway.