Synthetic glucocorticoids (GCs) are potential endocrine disrupting compounds that have been detected in the aquatic environment around the world in the low ng/L (nanomolar) range. GCs are used as immunosuppressants in medicine. It is of high interest whether clobetasol propionate (CP), a highly potent GC, suppresses the inflammatory response in fish after exposure to environmentally relevant concentrations. Bacterial lipopolysaccharide (LPS) challenge was used to induce inflammation and thus mimic pathogen infection. Zebrafish embryos were exposed to ≤1000 nM CP from ~1 h post fertilization (hpf) to 96 hpf, and CP uptake, survival after LPS challenge, and expression of inflammation-related genes were examined. Our initial experiments were carried out using 0.001% DMSO as a solvent vehicle, but we observed that DMSO interfered with the LPS challenge assay, and thus masked the effects of CP. Therefore, DMSO was not used in the subsequent experiments. The internal CP concentration was quantifiable after exposure to ≥10 nM CP for 96 h. The bioconcentration factor (BCF) of CP was determined to be between 16 and 33 in zebrafish embryos. CP-exposed embryos showed a significantly higher survival rate in the LPS challenge assay after exposure to ≥0.1 nM in a dose dependent manner. This effect is an indication of immunosuppression. Furthermore, the regulation pattern of several genes related to LPS challenge in mammals supported our results, providing evidence that LPS-mediated inflammatory pathways are conserved from mammals to teleost fish. Anxa1b, a GC-action related anti-inflammatory gene, was significantly down-regulated after exposure to ≥0.05 nM CP. Our results show for the first time that synthetic GCs can suppress the innate immune system of fish at environmentally relevant concentrations. This may reduce the chances of fish to survive in the environment, as their defense against pathogens is weakened.