Cortisol, also known as a stress-hormone, is a hormone produced by the adrenal cortex and plays an important role in glucose regulation. Since nerve cells can only produce their energy from carbohydrates and glycogen, when blood sugar levels and glycogen stores are low, cortisol stimulates conversion of protein to carbohydrates. This results in increased protein breakdown and it inhibits protein synthesis, effectively breaking down muscle tissue to produce carbohydrates. Cortisol is secreted during times of stress but high intensity resistance exercise stimulates cortisol production as well. Since resistance exercise also stimulates testosterone and growth hormone production, this is not a negative effect, since these more than counter the influence on hypertrophy of cortisol. In fact, it is believed that cortisol plays an essential role in remodeling muscle tissue after training.

As long as cortisol levels rise acutely as a result of intense training and it is allowed to decrease again, it benefits performance. However, when cortisol levels rise chronically, muscle tissue is broken down, reducing performance, increasing the risk of overtraining when training hard for prolonged periods. Reducing muscle mass also has a negative effect on metabolism, slowing it down making it easier to gain weight and build up fat. In summary, increased cortisol levels as an acute result of intense exercise, help maintaining muscle quality and benefit performance, whereas chronically increased cortisol levels break down muscle mass, decreasing health and performance. Chronically increased cortisol levels often are the result of periods of stress or training too much at a high intensity, although the latter happens less often in Western Society.

References:
-Baechle, T.R., Earle, W.R. (2008). Endocrine Responses to Resistance Exercise. Essentials of Strength Training and Conditioning. Third Edition. USA. Human Kinetics.