Although retinoids are known to regulate gene transcription by activating retinoid receptors, the targets of retinoid receptors are largely unknown. This study indicates effective all-trans retinoic acid (RA)-induced differentiation of human embryonal carcinoma cells engages p53. Unexpectedly, RA has been found to activate the transactivation function of p53 in the human embryonal carcinoma cell line, NT2/D1, in a retinoid receptor-dependent manner. A derived RA-resistant line, NT2/D1-R1, is deficient in this activity and is co-resistant to cisplatin. This indicates that RA and cisplatin responses may share a common pathway involving p53 in embryonal carcinomas. RA has no effect on p53 steady-state protein levels in either line. RA enhances endogenous p53 transactivation activity in NT2/D1 but not NT2/D1-R1 cells. In addition, RA induces transactivation activity of a gal4-p53 fusion protein, suggesting that RA activates p53 independent of increasing p53 levels or sequence-specific DNA binding. This activity is absent in retinoic acid receptor gamma (RARgamma)-deficient NT2/D1-R1 cells but can be restored upon co-transfection with specific RARs. Transient transfection of a dominant-negative p53 construct in NT2/D1 cells blocks the RA-mediated transcriptional decline of a differentiation-sensitive reporter plasmid and enhances survival of NT2/D1 cells following cisplatin treatment. Taken together, these findings indicate that RA activates the intrinsic activation function of p53 by a novel mechanism independent of effects on p53 stability or DNA binding and that this activation may be a general mechanism that contributes to RA-mediated G1 arrest.