Histologic and clinical improvement of sun-exposed skin following topical treatment with retinoic acid has been reported. Daily application of retinoic acid typically results within 2–5 d in an erythematous scaling reaction, which lessens with continued usage. The cellular, immunologic, and biochemical basis of this retinoid reaction and its role in the repair of photodamaged skin are not known. To investigate me retinoid reaction in man, we have treated non- sun-exposed skin with 0.1% retinoic acid cream (Retin-A, Ortho Pharmaceutical Corporation, Raritan, NJ) under occlusion for 4 d to induce erythema and then examined changes in 1) histology, 2) expression of cell-surface molecules, 3) the enzymes and second messengers of the phospholipase C/protein kinase C signal-transduction system, 4) levels of eicosanoids, and 5) levels of interleukin-1 protein and mRNA. These parameters were chosen for measurement both because they are indicators of epidermal function and previous studies suggest they may be responsive to retinoic acid treatment. Epidermal cell growth as judged by increased epidermal thickness and mitotic figures was significantly increased in retinoic acid-treated skin compared to vehicle-treated controls. Increased numbers of CD4 + T cells accompanied by prominence of dermal dendrocytes in the papillary dermis and focal keratinocyte expression of intercellular adhesion molecule-1 were observed in retinoic acid-treated biopsies. Phosphoinositide-specific phospholipase C activity and 1,2-diacylglycerol content were also elevated in retinoic acid-treated epidermis. Protein kinase C activity was reduced by one third in both the soluble and membrane fraction, suggesting down-regulation. Suprisingly, in view of the inflammatory nature of the retinoid reaction, no increases were observed in arachidonic acid, its metabolites, interleukin-1α, or interleukin-1β. To examine the specificity of the retinoid reaction, subjects were treated with the irritant sodium lauryl sulfate, under conditions that resulted in a reaction clinically similar to that observed with retinoic acid. The histologic alterations induced by sodium lauryl sulfate were found to be indistinguishable from those induced by retinoic acid. These data indicate that, although a wide range of cellular and molecular alterations occur in retinoic acid-treated skin, these changes may not be necessarily specific or unique for retinoic acid.