The uptake and metabolism of exogenous all-trans-retinoic acid by human epidermal keratinocytes in submerged culture was examined. Retinoic acid presented to keratinocytes in physiological form bound to albumin was rapidly taken up. Peak cellular concentrations were achieved within 1 h and were 50- to 100-fold higher than that in medium. Retinoic acid metabolism was less rapid but was vigorous, exhibiting a half-life of 6 h. Neither uptake nor metabolism was saturable at medium retinoic acid concentrations up to 1 microM. Eighty-five percent of retinoic acid was metabolized to unidentified polar compounds which were excreted from cells to the medium. The production and clearance of the polar metabolites was inhibited 60% by 10 microM ketoconazole. Fifteen percent of intracellular retinoic acid was converted to 3,4-didehydroretinoic acid, was proportional to cellular retinoic acid concentration, and was not affected by ketoconazole. Cellular retinyl ester content, which is sensitive to exogenous retinoic acid, was correlated with both the concentration and the quantity, of retinoic acid in the culture system. These results suggest that the metabolism of retinoic acid in keratinocytes is substrate limited and has potential to limit the availability of exogenous retinoic acid for retinoid signaling.