Retinoids inhibit proliferation of melanocytes and melanoma cells and affect disorders of hypo- and hyperpigmentation. Such effects might involve retinoid-binding proteins, retinoid metabolites and nuclear retinoid receptors for transcriptional activation. We detected messenger RNA transcripts for the cellular retinol- and retinoic acid-binding proteins (CRBP, CRABP I and II) in cultured epidermal melanocytes. In the melanoma cell lines the major transcript was CRABP II. Nuclear retinoic acid (RA) receptor transcripts and the 9-cis-retinoic acid receptor transcript were detected in all cells. The endogenous concentrations of retinol (ROH) and its metabolite 3,4-didehydroretinol (ddROH) in melanocytes were five times those in melanoma cells. When cells were incubated with [3H]ROH the main metabolites in the melanocytes were [3H]ddROH (4%) and [3H]RA (0.4%). Formation of [3H]RA was only detected in one melanoma cell line. Both melanocytes and melanoma cells produced an unidentified metabolite when incubated with [3H]ROH and [3H]RA. Dissimilarities in the metabolism and endogenous concentration of retinoids between benign and malignant melanocytes might play a key role in differentiation and growth regulation.