Glucocorticoids are essential for normal hypothalamic-pituitary-adrenal (HPA) axis activity; however, recent studies warn that exposure to excess endogenous or synthetic glucocorticoid during a specific period of prenatal development adversely affects HPA axis stability. We administered dexamethasone (DEX) to pregnant rats during the last week of gestation and investigated subsequent HPA axis regulation in adult male offspring in unrestrained and restraint-stressed conditions. With the use of real-time PCR and RIA, we examined the expression of regulatory genes in the hippocampus, hypothalamus, and pituitary, including corticotropin-releasing hormone (CRH), arginine vasopressin (AVP), glucocorticoid receptors (GR), mineralcorticoid receptors (MR), and 11-β-hydroxysteroid dehydrogenase-1 (11β-HSD-1), as well as the main HPA axis hormones, adrenal corticotropic hormone (ACTH) and corticosterone (CORT). Our results demonstrate that the DEX-exposed group exhibited an overall change in the pattern of gene expression and hormone levels in the unrestrained animals. These changes included an upregulation of CRH in the hypothalamus, a downregulation of MR with a concomitant upregulation of 11β-HSD-1 in the hippocampus, and an increase in circulating levels of both ACTH and CORT relative to unrestrained control animals. Interestingly, both DEX-exposed and control rats exhibited an increase in pituitary GR mRNA levels following a 1-h recovery from restraint stress; however, the increased expression in DEX-exposed rats was significantly less and was associated with a slower return to baseline CORT compared with controls. In addition, circulating levels of ACTH and CORT as well as hypothalamic CRH and hippocampal 11β-HSD-1 expression levels were significantly higher in the DEX-exposed group compared with controls following restraint stress. Taken together, these data demonstrate that late-gestation DEX exposure in rats is associated with persistent changes in both the modulation of HPA axis activity and the HPA axis-mediated response to stress.