Retinoic acid and retinyl acetate induce tissue transglutaminase to high levels in cultured SCC-4 keratinocytes, increasing the enzyme specific activity over 50-fold under optimal conditions. Pretreatment of the cells for a day with 2,3,7,8-tetrachlorodibenzo-p-dioxin (TCDD), 3-methylcholanthrene (3-MC) or benzo[a]pyrene almost completely prevented the induction observed upon subsequent treatment with retinoic acid for 2 days. Similar aromatic compounds that do not induce aryl hydrocarbon hydroxylase (pyrene, dibenzofuran) did not exhibit this suppressive effect. The concentration dependence on TCDD for induction of aryl hydrocarbon hydroxylase was nearly identical to that for its suppression of transglutaminase induction, with half-maximal effects observed at approximately 20 pM in each instance. Similarly, the concentrations of 3-MC giving half-maximal stimulation of the hydroxylase and suppression of the transglutaminase were comparable (0.9 and 0.3 microM, respectively), although this agent was almost five orders of magnitude less potent than TCDD. These observations reveal a loss of cellular sensitivity to vitamin A mediated by the Ah receptor.