Retinoids are indispensable for the health of mammals, which cannot synthesize retinoids de novo. Retinoids are derived from dietary provitamin A carotenoids, like beta-carotene, through the actions of beta-carotene-15,15'-monooxygenase (BCMO1). As the substrates for retinoid-metabolizing enzymes are water insoluble, they must be transported intracellularly bound to cellular retinol-binding proteins. Our studies suggest that cellular retinol-binding protein, type I (RBP1) acts as an intracellular sensor of retinoid status that, when present as apo-RBP1, stimulates BCMO1 activity and the conversion of carotenoids to retinoids. Cellular retinol-binding protein, type II (RBP2), which is 56% identical to RBP1 does not influence BCMO1 activity. Studies of mice lacking BCMO1 demonstrate that BCMO1 is responsible for metabolically limiting the amount of intact beta-carotene that can be absorbed by mice from their diet. Our studies provide new insights into the regulation of BCMO1 activity and the physiological role of BCMO1 in living organisms.