The Adh-1 gene product, ADH-A2, the only known murine class I alcohol dehydrogenase, is able to oxidize retinol (vitamin A) into retinaldehyde, the first enzymatic step in the conversion of retinol into its biologically active metabolite retinoic acid. We have investigated the developmental expression pattern of Adh-1 transcripts by in situ hybridization. Transcripts were first detected by embryonic day 10.5 in the mesonephros mesenchyme. During the following gestational days, Adh-1 transcripts were detected in several mesenchymal areas, such as nasal, laterocervical, and genital regions. Adh-1 transcripts were also detected in a small ectodermal domain at the anterior margins of both forelimbs and hindlimbs. During late fetal development. Adh-1 transcripts were found essentially in the epidermis and in a number of tissues which continue to express the gene after birth, such as liver, kidney, gut epithelium, adrenal cortex, testis interstitium, and ovarian stroma. In contrast, a strong expression of Adh-1 was found in the mesenchyme of developing lungs, but not in the adult organ. This highly regulated expression of Adh-1 is discussed with respect to the local synthesis of retinoic acid during development. Although the promoter of the human counterpart of Adh-1 contains a retinoic acid response element (Duester et al.  Mol. Cell. Biol. 11:1638-1646), we report that this element is not conserved in the murine gene. Consistently, Adh-1 promoter-containing reporter constructs were not retinoic acid-inducible in cotransfections assays with RARs and/or RXRs, suggesting that retinoic acid regulation of Adh-1 differs from that of the human gene.