Our understanding of the mechanism of action of retinoids has been greatly expanded by a series of recent findings. First, the three-dimensional structure of the ligand-binding domain of two retinoid receptors has been solved and suggests that ligand binding induces marked allosteric changes. Second, several co-factors interacting with the receptors have been cloned, some of which are capable of regulating the function of receptors. Third, the advent of synthetic retinoids helped define the activities of the receptors. Fourth, the study of the in vivo receptor-DNA interactions has revealed a previously unrecognized role of the ligand in regulating the stability of receptor-DNA complexes. These advances have revealed complex molecular interactions operating at multiple levels, opening new avenues of research for addressing their mechanisms.