The rationale for the use of all-trans-retinoic acid (RA) as an anticancer agent is based on its ability to inhibit growth and promote differentiation of some neoplastic cells. However, RA is not effective in all conditions of cell culture, and in some cases, it may stimulate cell growth. We used a serum-free culture system to study the effect of RA on cell proliferation. Following 2 days of RA exposure, 9 of a total of 15 cell lines showed an inhibition of cell growth (RA-sensitive), while 6 of 15 cell lines showed resistance to RA (RA-resistant cells). Metabolic studies and high-performance liquid chromatography analysis of the cell-associated and medium extracts from cells incubated with [3H]RA revealed that all nine RA-sensitive cells showed a very high activity to metabolize RA to polar metabolites found in the medium. In sharp contrast, RA-resistant cells retained about 60% of the original RA at 76 h. However, conditioned medium from the sensitive cells was without activity on the growth of sensitive and resistant cells. We conclude that a relationship exists between RA inhibition of cell growth and intracellular RA metabolism. These data may help design useful strategies in cancer therapy by retinoids and dispel the notion that RA itself is responsible for the inhibition of cell growth.