Formation of retinyl esters catalyzed by acyl-CoA:retinol acyltransferase (ARAT; retinol fatty-acyltransferase; EC 2.3.1.76) from intestinal mucosa has been studied in vitro in the presence of all-trans-retinoic acid. 2. The incubation system contained microsomal preparations from the tissue tested, radioactive retinol and palmitoyl-CoA. The product formed was separated from the substrates by chromatography on alumina columns. 3. All-trans-retinoic acid inhibited ARAT both from rat and human intestinal mucosa. 4. Inhibition occurred instantly. At a concentration of retinol of 80 microM, a 50% inhibition was obtained with 50 microM-retinoic acid. 5. The inhibition of ARAT by retinoic acid may be of importance for normal retinol absorption in patients receiving retinoid therapy.