P19 embryonal carcinoma cells can be induced to differentiate with a pulse of only 4 hr in retinoic acid (RA). The efficiency of RA-induced differentiation is independent of the position of P19 cells in the cell cycle but is critically dependent on the ratio between the number of cells and the number of moles of RA in the culture medium. P19 cultures at lower cell density are more efficiently induced to differentiate than cultures containing cells at higher cell densities. This effect is not mediated by cell-to-cell contact but may be related to the rapid metabolism of RA by the cells. Individual clones of differentiating P19 cells can develop into at least three different cell types suggesting that each cell in the population of embryonal carcinoma cells retains pluripotency.