Corticosteroids provide an effective treatment to reduce edema for conditions in which the blood-brain or blood-retinal barrier is compromised. However, little is known about the mechanism by which these hormones affect endothelial cell function. We hypothesized that hydrocortisone would reduce transport of water and solutes across bovine retinal endothelial cell (BREC) monolayers coincident with changes to the tight junction protein occludin. Treatment of BREC with 103 nm hydrocortisone for two days significantly decreased water and solute transport across cell monolayers. Immunoblot analysis of occludin extracted in SDS or urea based buffers revealed a 1.65- or 2.57-fold increase in content, respectively. A similar two-fold increase in occludin mRNA was observed by real-time PCR. Immunocytochemistry revealed hydrocortisone dramatically increased both occludin and ZO-1 staining at the cell border. Additionally, 4 h of hydrocortisone treatment significantly reduced occludin phosphorylation. To our knowledge, this is the first example of a regulated decrease in occludin phosphorylation associated with increased barrier properties. In conclusion, hydrocortisone directly affects retinal endothelial cell barrier properties coincident with changes in occludin content, phosphorylation and tight junction assembly. Localized hydrocortisone therapy may be developed as a treatment option for patients suffering from retinal edema due to diabetes.