Morphological analysis of vitamin A-deficient rat fetuses and of retinoic acid receptor (RAR and RXR) mutant mice have demonstrated that retinoic acid (RA) is essential for lung development. To gainfurther insight into RA signaling pathways during primary lung budformation and lung branching, we have investigated the effects of RA and of a pan-RAR antagonist in cultures of whole embryos and lung explants. Treatment of E8.0 embryos with the pan-RAR antagonist inhibits the formation of the primitive respiratory system. On the other hand, treatment of E11.75 and E12.5 lung explants with RA inhibits branching morphogenesis, whereas treatment with the pan-RAR antagonist at the same developmental stages stimulates formation of distal buds. The inhibitory effect of RA on branching is strongly decreased in RARbeta null lungs, while enhancement of budding by the pan-RAR antagonist is not affected by an RARgamma null mutation. Additionally, cellular retinol binding protein one (CRBPI) null lungs are more sensitive than wild type lungs to the pan-RAR antagonist-induced stimulation of branching. These data indicate that retinoid signaling is indispensable for the formation of primary lung buds and the oesophagotracheal septum from the primitive foregut. They also suggest that at the pseudoglandular stage, RA signaling through RARbeta, but not RARgamma, inhibits distal bud formation thereby promoting the formation of conducting airways. Moreover, the level of CRBPI in the pseudoglandular lung appears to participate in the control of branching morphogenesis.