Retinoids have demonstrated activity in the chemoprevention of aerodigestive tract cancer. Potentially contributing to their lung cancer chemopreventive effects, retinoids inhibit the growth of human bronchial epithelial (HBE) cells. We observed previously that all-trans retinoic acid (t-RA) arrests the growth of HBE cells in the G0 phase of the cell cycle through activation of retinoic acid receptor-dependent pathways, which enhances the association of E2F-4 with retinoblastoma protein family members, converting E2F into a transcriptional suppressor. In this study, we examined the mechanism by which t-RA blocks cell cycle progression in HBE cells and the possibility that this signaling event is blocked in non-small cell lung cancer (NSCLC) cells that are refractory to the growth inhibitory effects of t-RA. t-RA suppressed the expression and activity of cyclin D1, cyclin E, and cyclin-dependent kinases (CDK)-2 and CDK-4, increased expression of the CDK inhibitor p27, and shifted the retinoblastoma protein to a hypophosphorylated form. Posttranslational mechanisms contributed to the changes in CDK-2, CDK-4, and p27 levels, which, in the case of CDK-4, involved the ubiquitin-proteasome pathway. In contrast, despite retinoic acid receptor transcriptional activation, these signaling events did not occur in a NSCLC cell line that is refractory to growth inhibition by t-RA. These findings provide the first evidence that t-RA activates degradation of CDK-4 through the ubiquitin-proteasome pathway, a novel mechanism by which t-RA causes HBE cells to exit the cell cycle, and blockade of these signaling events may contribute to the development of retinoid resistance in NSCLC cells.