The results reported here indicate that retinoic acid (RA) induces growth arrest and differentiation only in MyoD-expressing muscle cells. Transient transfection assays reveal a functional interaction between MyoD, a key myogenic regulator and RA-receptors, principal mediators of RA actions. Interestingly, we demonstrate that RXR-MyoD-containing complexes are recruited at specific MyoD DNA-binding sites in muscle cells. Furthermore, we also demonstrate that RA-receptors and the muscle basic helix-loop-helix (b-HLH) proteins interact physically. Mutational analysis suggests that this interaction occurs via the basic region of muscle b-HLH proteins and the DNA-binding domain of RA-receptors and is important for functional interactions between these two families of transcription factors. In conclusion, these results highlight novel interactions between two distinct groups of regulatory proteins that influence cell growth and differentiation.