Dendritic cells (DCs) expressing CD1d, a molecule responsible for lipid antigen presentation, are capable of enhancing natural killer T (iNKT) cell proliferation. The signals controlling CD1 expression and lipid antigen presentation are poorly defined. We have shown previously that stimulation of the lipid-activated transcription factor, peroxisome proliferator-activated receptor (PPAR)gamma, indirectly regulates CD1d expression. Here we demonstrate that PPARgamma, turns on retinoic acid synthesis by inducing the expression of retinol and retinal metabolizing enzymes such as retinol dehydrogenase 10 and retinaldehyde dehydrogenase type 2 (RALDH2). PPARgamma-regulated expression of these enzymes leads to an increase in the intracellular generation of all-trans retinoic acid (ATRA) from retinol. ATRA regulates gene expression via the activation of the retinoic acid receptor (RAR)alpha in human DCs, and RARalpha acutely regulates CD1d expression. The retinoic acid-induced elevated expression of CD1d is coupled to enhanced iNKT cell activation. Furthermore, in vivo relevant lipids such as oxidized low-density lipoprotein can also elicit retinoid signaling leading to CD1d up-regulation. These data show that regulation of retinoid metabolism and signaling is part of the PPARgamma-controlled transcriptional events in DCs. The uncovered mechanisms allow the DCs to respond to altered lipid homeostasis by changing CD1 gene expression.