Retinoic acid (RA) treatment of rat tracheal epithelial (RTE) cells, pre-exposed to the direct-acting carcinogen N-methyl-N'-nitro-N-nitrosoguanidine (MNNG), inhibited transformation in a dose-dependent manner. Treatment with RA at concentrations ranging from 3-33 nM reduced the MNNG-induced transformation frequencies by 13-81% and in some experiments by greater than 90%. RA treatment for only 3 days caused 65-75% inhibition of transformation; treatments of longer duration resulted in greater inhibition of transformation. Delaying the onset of RA treatment reduced its effectiveness, but even when RA treatment was delayed for 3 weeks following MNNG exposure, 60% inhibition still occurred. The inhibition of transformation appeared to be irreversible. The colony forming efficiency of cells isolated from transformed colonies 5 weeks after MNNG exposure was drastically reduced when the replated cells were treated with RA either 1 day or 4 days after plating, indicating that RA blocked cell replication. However, cells isolated from transformed colonies at later times after MNNG exposure were increasingly resistant to the antiproliferative effects of RA. The RA concentration causing 50% inhibition (RA-IC50) of colony formation was 0.1-0.3 nM for cells isolated from 3-5 week-old transformed colonies; it increased greater than 100-fold for cells isolated from 12-week-old transformants. Five established RTE cell lines also showed a much increased resistance to the antiproliferative effects of RA; two of these cell lines were even slightly stimulated in their colony forming ability by RA. The RA-IC50 of colony forming efficiency of normal RTE cells was also determined and compared to that of cells isolated from 5-week-old transformed colonies. Since the normal RTE cells require 3T3 feeder layers for clonal growth, both cell types were grown on feeders. For both cell types, the RA-IC50 was similar (150-300 nM); the requirement for relatively high RA concentrations was attributed in part to the rapid RA metabolism by the feeder cells. These experiments show that early RTE cell transformants are growth-inhibited by RA; however, they increasingly lose their sensitivity to the growth controlling effects of RA as they progress to a more advanced stage of transformation. The inhibition of tracheal cell transformation by RA is probably due to the antiproliferative effects of the retinoid.