Alcoholism can result in fatty liver that can progress to steatohepatitis, cirrhosis, and liver cancer. Mice fed alcohol develop fatty liver through endocannabinoid activation of hepatic CB(1) cannabinoid receptors (CB(1)R), which increases lipogenesis and decreases fatty acid oxidation. Chronic alcohol feeding also up-regulates CB(1)R in hepatocytes in vivo, which could be replicated in vitro by co-culturing control hepatocytes with hepatic stellate cells (HSC) isolated from ethanol-fed mice, implicating HSC-derived mediator(s) in the regulation of hepatic CB(1)R (Jeong, W. I., Osei-Hyiaman, D., Park, O., Liu, J., Bátkai, S., Mukhopadhyay, P., Horiguchi, N., Harvey-White, J., Marsicano, G., Lutz, B., Gao, B., and Kunos, G. (2008) Cell Metab. 7, 227-235). HSC being a rich source of retinoic acid (RA), we tested whether RA and its receptors may regulate CB(1)R expression in cultured mouse hepatocytes. Incubation of hepatocytes with RA or RA receptor (RAR) agonists increased CB(1)R mRNA and protein, the most efficacious being the RARgamma agonist CD437 and the pan-RAR agonist TTNPB. The endocannabinoid 2-arachidonoylglycerol (2-AG) also increased hepatic CB(1)R expression, which was mediated indirectly via RA, because it was absent in hepatocytes from mice lacking retinaldehyde dehydrogenase 1, the enzyme catalyzing the generation of RA from retinaldehyde. The binding of RARgamma to the CB(1)R gene 5' upstream domain in hepatocytes treated with RAR agonists or 2-AG was confirmed by chromatin immunoprecipitation and electrophoretic mobility shift and antibody supershift assays. Finally, TTNPB-induced CB(1)R expression was attenuated by small interfering RNA knockdown of RARgamma in hepatocytes. We conclude that RARgamma regulates CB(1)R expression and is thus involved in the control of hepatic fat metabolism by endocannabinoids.