Terminal differentiation in keratinocytes involves positive as well as negative regulation by retinoic acid receptors and retinoid X receptors at retinoid response elements.

Terminal differentiation of epidermal keratinocytes is inhibited by 1 microM retinoic acid, a concentration which induces differentiation in a number of cell types, including F9 teratocarcinoma cells. The molecular basis for these opposing retinoid responses is unknown, although retinoic acid receptors (RARs) and retinoid X receptors (RXRs) have been detected in both cell types. When F9 cells are stably transfected with a truncated RAR alpha lacking the E/F domain necessary for ligand binding and RAR/RXR dimerization, action at retinoid response elements is suppressed and cells produce a retinoic acid-resistant phenotype; i.e., they are blocked in differentiation (A. S. Espeseth, S. P. Murphy, and E. Linney, Genes Dev. 3:1647-1656, 1989). If retinoid receptors influence epidermal differentiation only in a negative fashion, then suppression of transactivation at retinoid response elements would be expected to enhance, rather than block, keratinocyte differentiation. In this study, we show that surprisingly, even though constitutive expression of an analogous truncated RAR gamma in keratinocytes specifically suppressed transactivation at retinoid response elements, keratinocytes were blocked, rather than enhanced, in their ability to undergo morphological and biochemical features of differentiation. These findings demonstrate a direct and hitherto unrecognized role for RARs and RXRs in positively as well as negatively regulating epidermal differentiation. Additionally, our studies extend those of Espeseth et al. (Genes Dev. 3:1647-1656, 1989), indicating a novel RAR function independent of the E/F domain.