The environmental contaminant dioxin exerts most of its effects by activating the aryl hydrocarbon receptor (AhR). The AhR is considered to play not only a role in the regulation of xenobiotic metabolism, but also for development, growth, and differentiation. The transcript levels of the AhR and its associated translocator protein (ARNT) were found to increase with ongoing differentiation in the human keratinocyte cell line HaCaT. Correspondingly, in situ hybridization studies in normal human skin revealed an absence of AhR-expression in proliferating basal cells and increasing transcript levels in upper cell layers, in dependence of keratinocyte differentiation. AhR expression in differentiation-deficient hyperproliferative psoriatic skin was markedly decreased. When keratinocytes were continuously treated with 1 microM retinoic acid (RA), the upregulation of AhR- and ARNT-mRNA levels was inhibited as was keratin 4-expression, a marker of HaCaT-keratinocyte differentiation. In contrast, treatment of already differentiated cells with RA did not down-regulate these transcript levels. The mRNA levels of the prevalent retinoic acid receptors in keratinocytes, RAR gamma and RXR alpha, were not influenced by the process of differentiation or by addition of RA. Our data suggest that the regulation of AhR-, ARNT- and keratin 4-expression by RA is indirect and mediated by a yet to be identified factor.