In embryonal carcinoma (EC) cells retinoic acid (RA) strongly induces transcription from the RA receptor beta 2 (RAR beta 2) promoter through an RA response element (RARE) located in close proximity to the TATA box. Here we demonstrate that recombinant human TATA box-binding protein, hTFIID, and RAR functionally cooperate in transactivation of the RAR beta 2 promoter in EC cells in a strictly RA-dependent manner. We demonstrate that the core domain of hTFIID is sufficient to mediate RAR-dependent transcription and that Drosophila, but not yeast, TFIID can substitute for hTFIID. In COS cells ectopic expression of the E1A protein is a prerequisite for hTFIID and RAR to cooperate in transactivation. We propose a model for transcriptional regulation of the RAR beta 2 promoter in EC cells in which RAR, following activation by RA, functionally interacts with hTFIID via an E1A-like activity present in EC cells.