Retinoids (structural and functional analogs of vitamin A) are potent antiproliferative agents whose mode of action is poorly understood. It has been suggested that the molecular events that underscore their action involve alterations in gene expression, but no gene has yet been shown to be directly regulated by these molecules. Several years ago, we found that retinoic acid caused an accumulation of the enzyme tissue transglutaminase in murine peritoneal macrophages and in human promyelocytic leukemia (HL-60) cells. We now report that this induction is caused by an increase in the mRNA for this enzyme. Retinoic acid is the only mediator of this induction, since its effects do not depend on the presence of serum proteins. The induction of tissue transglutaminase mRNA is not due to an increase in its stability but to an increase in the relative transcription rate of its gene. We present a model to correlate the retinoid induction of tissue transglutaminase with retinoid effects on cellular growth and differentiation.