Retinoids are a group of natural and synthetic vitamin A analogues that possess the unique ability to modulate the growth and differentiation of normal, premalignant and malignant epithelial and mesenchymal cells in vitro and in vivo. Naturally occurring retinoids act as physiologic regulators of embryonal development and maintain the proper differentiation of many epithelial tissues in the adult. Retinoids also act pharmacologically to restore regulation of differentiation and growth in certain premalignant and malignant cells in vitro and in vivo. Consequently, these compounds are being evaluated clinically for cancer prevention and therapy. There are strong indications that retinoids exert their diverse effects by regulating the expression of specific genes. The mechanism of this action is beginning to be unraveled following the discovery that nuclear receptors for retinoic acid are present in many cells and tissues. These receptors belong to the large family comprising steroid, thyroid hormone, and vitamin D3 receptors, which are DNA-binding proteins that function as trans-acting transcription modulating factors. We review here some of the properties of these receptors, their interactions with responsive elements in the promoter region of specific genes, and the recent demonstration of their involvement as mediators of the effects of retinoids on growth and differentiation.