The effect of retinoic acid (RA) on the colony-stimulating-factor-dependent clonal growth of myeloid progenitors was assessed in semisolid agar cultures of mouse bone marrow cells using L-cell-conditioned medium that gave rise to macrophage colonies, granulocyte colonies, and mixed macrophage-granulocyte colonies and clusters. RA was found to enhance the overall formation of myeloid colonies (about 50%) and clusters in 7-day cultures. The increase was due to an enhanced formation of macrophage colonies (70-250%) and clusters which reached a maximal value at about 3 microM RA. In 4-day cultures, the effect of RA on macrophage colony formation was biphasic with a maximal enhancement at 10 nM. RA suppressed granulocyte-colony formation in 4-day cultures. RA increased the phagocytic activity of bone-marrow-derived macrophages at all stages of differentiation and/or maturation in culture. The Fc-receptor-mediated erythrophagocytosis as well as the phagocytosis of heat-killed yeast cells (HK-yeast) and starch particles increased by RA treatment in a dose-dependent manner, reaching an increase of 100-200% of the activity expressed in the absence of RA. Peritoneal exudate macrophages likewise exhibited an increased phagocytic response to a variety of particles, at both physiological and pharmacological concentrations of RA. Expression of an RA-mediated increase in phagocytic activity required a prolonged incubation with RA (greater than 19 hr). The data suggest that RA may be of physiological relevance in the regulation of proliferation and function of hemopoietic cells. Therapeutic doses of RA may potentiate macrophage proliferation and function, elements that are crucial at all phases of the various defense mechanisms that the organism possesses.