The three retinoic acid receptors (RAR alpha, RAR beta and RAR gamma) are known to modulate the transcription of target genes through interaction of the individual receptors with their naturally occurring ligand, retinoic acid (RA). Since RA has multiple effects in vivo, considerable effort has recently been devoted to finding selective compounds to elucidate the functions of individual receptors and to relate these functions to specific in vivo effects. The racemic synthetic retinoid 6-[(5,5,8,8-tetramethyl-5,6,7,8-tetrahydro-2-naphthyl)hydroxy-methyl]-2- naphthalene carboxylic acid has recently been identified as an RAR gamma-selective agonist. A synthetic method involving lipase-mediated transformation has been developed to prepare the individual enantiomers. Discrimination between the two enantiomers is seen in both transcriptional activity and binding to recombinant receptors with the (S)-enantiomer being the more active. Differences between the two compounds are also seen in the Rhino mouse utriculi reduction assay and the rabbit irritation model. In both animal models, the (S)-enantiomer consistently gave a greater response. Taken together, these results suggest that the activity and irritation seen with RA and related compounds is receptor mediated. Further, the strong selectivity of the compounds reported here for RAR gamma suggests that this receptor plays an important role in these in vivo biological activities. The discrimination between these enantiomers may be useful in the design of novel retinoids with uniquely defined biological properties.