The chemotherapeutic agent retinoic acid (RA) inhibits the proliferation and invasion of many tumor types. RA chemotherapy in head and neck squamous cell carcinoma (SCC) patients reduces recurrence and induces regression of premalignant lesions. The effects of RA are mediated by both cytoplasmic and nuclear proteins. In the nucleus, a family of ligand-dependent transcription factors, the retinoic acid receptors (RAR) and the retinoid X receptors (RXR), regulate target gene response to RA. In the cytoplasm, the cellular retinoic acid binding proteins I and II (CRABP) regulate intracellular RA concentration, transport, and metabolism. Alterations in CRABP expression have been shown to affect target gene response and the phenotype of cancer cells. To elucidate the role of these proteins in mediating the RA response, we examined target gene expression and malignant phenotype in SCC25 cells expressing an antisense CRABP II construct. RA induced CRABP II mRNA levels 2 fold in SCC25 cells by transcriptional upregulation. Expression of the antisense construct reduced CRABP II expression to undetectable levels. Inhibition of CRABP II expression resulted in significant downregulation of RA responsive genes. These reductions were the result of decreased transcription from RA responsive promoters. Surprisingly, clones expressing the antisense CRABP construct were less sensitive to RA mediated inhibition of proliferation. These clones were also less invasive in an in vitro invasion assay, likely due to downregulation of matrix metalloproteinase activity. We conclude that CRABP II affects the transcription of RA responsive genes which regulate proliferation and invasion of head and neck SCCs.