In this paper the biological activity of several newly synthesized benzoic acid derivatives of the Am- and Ch- series, which are structurally different from retinoic acid and arotinoids, was examined. These compounds inhibit squamous cell differentiation of rabbit tracheal epithelial cells in vitro as indicated by the inhibition of transglutaminase Type I and cholesterol 3-sulfate levels. In contrast to the inhibition of differentiation in rabbit tracheal cells, these compounds induce differentiation of mouse embryonal carcinoma F9 and human promyelocytic leukemia HL60 cells. The Am- and Ch- series of compounds also affect several parameters of cell proliferation. These agents are very potent inhibitors of growth of melanoma S91 cells and inhibit the induction of ornithine decarboxylase activity by phorbol 12-myristate 13-acetate in 3T6 fibroblasts. These results show that the Am- and Ch- derivatives elicit in several cell systems the same cellular responses as retinoic acid. We propose, therefore, that they exhibit mechanism(s) of action similar to those of retinoids. Comparison of the biological response with the binding capacity to the cellular retinoic acid-binding protein shows a lack of a direct correlation.