Glucocorticoid (GC) signalling via the glucocorticoid receptor (GR) is essential for normal lung development. Previous work using conditional mouse knockouts of the GR gene established that GR activity in the mesenchymal compartment of the lung is critical for normal respiratory development. Screens for GC-target genes with conditional mesenchymal GR deficient mouse lung (GRmeskO) identified Versican (Vcan), an important extracellular matrix (ECM) component and cell proliferation regulator, as a potential GR-regulated gene target. Alternative exon splicing of the Vcan gene generates up to 5 isoforms termed V0, V1, V2 V3 and V4 that vary in structure, tissue-specific expression and function. We hypothesised that the severe mesenchymal cell hyperplasia observed in the GRmesKO fetal mouse lung is in part due to the lack of normal GR-mediated repression of Vcan levels. We show that of the five Vcan isoforms, the V1 isoform is the predominate isoform in the fetal mouse lung. Both V1 mRNA and protein levels were strongly over-expressed in the GRmesKO lung at E18.5 compared to wildtype controls. To further characterise the proliferative role of Vcan we performed siRNA-mediated knockdown of Vcan expression in primary rat lung fibroblasts that showed a modest reduction in cell proliferation. Finally, we showed that ADAMTS12, a protease that has been proposed to degrade Vcan is also markedly reduced in the GRmesKO mouse lung and was strongly induced by both cortisol and betamethasone in cultures of primary fetal rat lung fibroblasts. In summary, GC steroids regulate repression of the ECM protein Vcan and induction of the protease ADAMTS12 to contribute to coordinated normal respiratory development in mammals.