Because steroids contain large regions with only nonpolar carbon-carbon and carbon-hydrogen bonds, they are hydrophobic. Steroids are lipids, dissolving in other lipids. The lipid soluble character of steroids allows them to diffuse through the target cell's plasma membrane, as well as the target cell's nuclear membrane. Upon entering the nucleus, the steroid binds to a receptor to form an activated hormone-receptor complex which then activates the transcription of specific mRNAs in the nucleus.

The comparison and contrast of signaling mechanisms between steroid hormones and polar non-steroid hormones is a major MCAT theme. Non-steroid hormones do not cross the plasma membrane of the target cell (with the exception of thyroxine). Non-steroid hormones utilize 2nd messenger systems in signal transduction.