Many of the pleiotropic effects of retinoids are likely to be mediated by nuclear retinoic acid receptors (RAR) acting as ligand-dependent enhancer factors. However, in previous studies we have been unable to document altered RAR expression at the RNA level in response to retinoic acid (RA) treatment or in psoriatic lesions, conditions characterized by marked alterations in keratinocyte proliferation and differentiation, which are either caused by or responsive to RA. In an attempt to identify other potential regulators of RA responsiveness, we have used RNA blot hybridization to study the expression of the cellular retinoic acid binding proteins (CRABP) CRABP-I and CRABP-II, the RAR-gamma isoforms RAR-gamma 1 and RAR-gamma 2, and the low-affinity RAR homologue RXR in normal, RA-treated, and psoriatic human epidermis. CRABP-II is selectively and markedly induced by RA in adult human skin (J Biol Chem 266:17662-17666, 1991). However, in submerged, serum-free keratinocyte cultures, CRABP-II mRNA could not be induced by RA. Comparisons of intact human skin, submerged keratinocyte cultures, and human skin equivalent cultures indicated that induction of CRABP-II by RA requires epidermal stratification, dermal-epidermal interactions, or both. CRABP-II transcripts were also expressed in heat-separated human dermis at levels similar to those found in epidermal keratome biopsies, whereas CRABP-I transcripts were undetectable in dermal RNA. CRABP-II transcripts were markedly elevated in psoriatic lesions, as they were in RA-treated skin. In contrast, CRABP-I mRNA was undetectable and not increased in psoriatic lesions. Expression of RAR-gamma isoforms and RXR was not detectably altered in either psoriatic lesions or in RA-treated skin. Thus, altered expression of CRABP-II appears more likely to regulate the cutaneous actions of RA than does altered expression of CRABP-I, RXR, or RAR-gamma isoforms. From these and other results, a model for regulation of RA action involving sequestration of RA by CRABP-II is proposed.