Previous observations have shown that Müller glial cells of the vertebrate retina contain cellular retinoid-binding proteins, that the retina contains retinoic acid, and that cellular retinoic acid-binding protein is present in amacrine neurons (and, in some species, Müller cells) within the retina. These findings led to the suggestion that Müller cells may synthesize retinoic acid and release it for use by other retinal cells. To test this possibility, we cultured Müller cells from adult rabbit retinas, incubated the cultures with radioactive retinol, and identified and quantified the resultant radioactive retinoids by HPLC. Retinaldehyde was rapidly synthesized from retinol, reaching a plateau of 1-2 pmol mg-1 cell protein by 30 min. Retinoic acid initially accumulated more slowly, but by 30 min constituted most of the synthesized retinoid. While the retinaldehyde remained within the cells, retinoic acid was rapidly released into the medium; extracellular retinoic acid exceeded the intracellular amount after 30 min of incubation. Smaller amounts of retinyl esters were also synthesized and retained by the cells. These results are consistent with the suggestion that Müller glia are a source of retinoic acid in the retina. The synthesis of retinoic acid by these cells, and the presence of retinal neurons that contain cellular retinoic acid-binding protein, raise the possibility that retinoic acid plays a role in the retina, although this role is not presently known. Furthermore, these results may have implications for other parts of the adult nervous system. Adult brain contains retinol- and retinoic acid-binding proteins, and, therefore, may also be a site of retinoic acid metabolism. Because of the relatively simple cellular organization of the retina and its demonstrated capacity to synthesize retinoic acid, the retina may be a system of choice for further studies of the synthesis and function of retinoic acid in adult neural tissue.