Emphysema is characterized by the destruction of alveoli and alveolar ducts within the lungs. Retinoid signaling is believed to play a role in alveologenesis, with the retinoic acid receptor gamma thought to be required for alveolar formation. Based on this hypothesis, Roche Holding AG is developing palovarotene (R-667, RO-3300074), a selective retinoic acid receptor gamma agonist for the treatment of emphysema. In small animal studies, palovarotene was claimed to reverse the structural, functional and inflammatory features of cigarette smoke-induced emphysema. Phase I clinical trials of palovarotene in patients with emphysema demonstrated that the drug is well tolerated, with improvements observed in markers of emphysema progression. Unlike all-trans retinoic acid, the pharmacokinetic profile of palovarotene appears to be dose-proportional. At the time of publication, a phase II, placebo-controlled trial was ongoing, and was expected to report prospective measurements of exercise, gas transfer and lung densitometry endpoints. The development of a selective retinoic acid receptor gamma agonist for the treatment of emphysema represents the first of a new class of small-molecule regenerative therapies that may prove useful for the treatment of destructive or age-related lung disease.