The mechanism by which all-trans retinoic acid (ATRA) leads to a G(1) arrest of the cell cycle remains unclear. We show here that the decrease in D-type cyclin levels observed following ATRA treatment correlates with an increase in the rate of cyclin D1 ubiquitylation in both T-47D and MCF-7 breast cancer cell lines. However, MCF-7 cells are more resistant to ATRA than T-47D cells indicating that cyclin D1 degradation is not sufficient for ATRA-mediated arrest. We found a striking difference between these cells in that while ATRA induces an elevation in the cdk inhibitor p27 in T-47D cells, this is not observed in the ATRA-resistant MCF-7 cells. Furthermore, we demonstrate that ATRA promotes the ubiquitylation of Skp2, an F-box protein that targets p27 for degradation. Moreover, overexpression of Skp2 in T-47D cells prevents accumulation of p27 and promotes resistance to ATRA. In addition, overexpression of cyclin D1 in T-47D cells also promotes ATRA resistance. We found that the mechanism of ATRA-induced ubiquitylation of cyclin D1 and Skp2 is independent of CUL-1 expression and that ATRA can rescue cyclin D1 degradation in the uterine cell line SK-UT-1, where D-type cyclins are stabilized due to a specific defect in proteolysis. These data suggest that ATRA induces a novel pathway of ubiquitylation and that the degradation of the F-box protein Skp2 is the mechanism underlying p27 accumulation and cyclin E-cdk2 inactivation following ATRA treatment.