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The antimalaria drug chloroquine has been used as an anti-inflammatory agent for treating systemic lupus erythematosus and rheumatoid arthritis. We report that chloroquine promoted the transrepression of proinflammatory cytokines by the glucocorticoid receptor (GR). In a mouse collagen-induced arthritis model, chloroquine enhanced the therapeutic effects of glucocorticoid treatment. By inhibiting lysosome function, chloroquine synergistically activated glucocorticoid signaling. Lysosomal inhibition by either bafilomycin A1 (an inhibitor of the vacuolar adenosine triphosphatase) or knockdown of transcription factor EB (TFEB, a master activator of lysosomal biogenesis) mimicked the effects of chloroquine. The abundance of the GR, as well as that of the androgen receptor and estrogen receptor, correlated with changes in lysosomal biogenesis. Thus, we showed that glucocorticoid signaling is regulated by lysosomes, which provides a mechanistic basis for treating inflammation and autoimmune diseases with a combination of glucocorticoids and lysosomal inhibitors.