Cell culture provides controlled conditions in which to investigate the effects of retinoids on the molecular and cell biology of epidermal differentiation. In general, retinoids enhance proliferation and desquamation of cultured epidermal cells and suppress differentiation. In the presence of 10(-6) mol/L retinoic acid, cultured human epidermal cells stratify, but they do not form the granular layer and anucleate, stratum corneum-like superficial layer typical of normal epidermis. Retinoic acid in the growth medium alters keratin synthesis and inhibits the formation of cross-linked envelopes. Expression of other keratinocyte proteins, including filaggrin and components of desmosomes, may also be affected by retinoids. The molecular mechanisms of retinoid action on epidermal cells are still unclear. Cells cultured from normal and pathologic epidermis appear to differ significantly in their responsiveness to retinoids. Recent data suggest that retinoids may modulate gene transcription, stabilize cell membranes, and alter posttranslational processing of several keratinocyte proteins.