Retinoic acid (RA) modulates transcription of numerous target genes, thereby regulating a myriad of biological processes. It is well established that RA functions by activating retinoic acid receptors (RARs), which, in turn, control cell differentiation, proliferation, and apoptosis. However, perplexing reports of diverse and sometime opposing actions of RA have been published. Hence, while RA induces apoptosis and inhibits cell growth in some settings, it potentiates proliferation and acts as an anti-apoptotic agent in others. These observations raise the possibility that signaling pathways other than RAR may be involved in mediating RA activities. Here we show that RA is a high affinity ligand for another nuclear receptor, namely the orphan receptor peroxisome proliferator-activated receptor (PPAR) beta/delta. We demonstrate that while RA does not activate PPARalpha and PPARgamma, it binds to PPARbeta/delta with nanomolar affinity, modulates the conformation of the receptor, promotes interaction with the coactivator SRC-1, and efficiently activates PPARbeta/delta-mediated transcription. Transcriptional signaling by RA is thus exerted by a dual pathway, providing a rationale for understanding divergent cellular responses to this hormone.