Vitamin A (retinol) is essential for normal mammalian development. However, its biological activity depends upon its conversion to retinoic acid (RA), a local mediator of cellular proliferation and differentiation. Previous studies have shown that embryonic RA is found specifically in tissues known to depend upon vitamin A for normal development and that its production follows uptake of maternal retinol. The aim of this study was to identify the mechanism for tissue-specific generation of RA in developing rat embryos. Here we show immunohistochemical localization of the retinol binding protein receptor, cellular retinol binding protein, retinol dehydrogenase and retinal dehydrogenase in rat embryos (presomitic to the 25-30 somite pair stage). These proteins are proposed to be responsible for cellular uptake of retinol, its intracellular transport and its conversion to RA. Thus, they potentially constitute the entire metabolic pathway from vitamin A to RA. All four proteins were detected specifically in tissues that are known to depend upon vitamin A for normal development including the yolk sac, heart, gut, notochord, somites, sensory placodes and the limb. Furthermore, our previous studies have demonstrated that uptake of retinol into the yolk sac depends upon a retinol binding protein receptor. Here we provide evidence that this mechanism functions also in the heart. Colocalization of cellular retinol binding protein, retinol and retinal dehydrogenase with the retinol binding protein receptor in tissues dependent upon vitamin A for normal development suggests that coordinate functioning of these proteins is responsible for cellular uptake of circulating retinol and its metabolism to RA. This is the first evidence of a tissue-specific mechanism for generation of RA from its precursor retinol in the developing embryo.