The classical dogma of glucocorticoid-induced insulin resistance is that it is caused by the transcriptional activation of hepatic gluconeogenic and insulin resistance genes by the glucocorticoid receptor (GR). Here, we find that glucocorticoids also stimulate the expression of insulin-sensitizing genes, such as Irs2. The transcriptional coregulator EHMT2 can serve as a transcriptional coactivator or a corepressor. Using male mice that have a defective EHMT2 coactivation function specifically, we show that glucocorticoid-induced Irs2 transcription is dependent on liver EHMT2’s coactivation function and that IRS2 play a key role in mediating the limitation of glucocorticoid-induced insulin resistance by EHMT2’s coactivation. Overall, we propose a model in which glucocorticoid-regulated insulin sensitivity is determined by the balance between glucocorticoid-modulated insulin resistance and insulin sensitizing genes, in which EHMT2 coactivation is specifically involved in the latter process.