The small lipid retinoic acid is known to promote neuronal differentiation in vitro and to act as a teratogen in the embryonic brain, but very little is known about the natural role of endogenously synthesized retinoic acid in forebrain development. Retinoic acid is synthesized mainly by three retinaldehyde dehydrogenases. We show here where the retinaldehyde dehydrogenases for the developing telencephalon are expressed and how their expression patterns change over developmental time. Retinoic acid diffusing from the retinaldehyde dehydrogenase sites is likely to influence the early telencephalon before the beginning of neurogenesis, as well as differentiation and radial migration of neurons into the cerebral cortex. Because of its diffusible character, retinoic acid represents a unique tool for the coordination of growth processes over an intermediate distance range in the developing telencephalon.