Retinoids, in particular all-trans retinoic acid (T-RA), are essential for normal development and homeostasis of vertebrates. Although many effects of retinoids, particularily with regard to teratogenicity, have been described in the literature, the mechanisms by which these simple signalling molecules work has only recently begun to be elucidated. We now recognize at least two classes of retinoid-binding proteins and two families of retinoid receptors. The ultimate interpretation of the retinoid signal within a given cell is probably the result of a complex series of interactions between these proteins, yet little is understood concerning the role each member of this signalling pathway plays. It is therefore imperative to dissect the molecular mechanisms which transduce the effects of these ligands, both in vivo and in isolated systems. One approach we are employing is gene targeting of retinoic acid receptors (RARs) and cellular retinoid-binding proteins to generate mice in which one or more of these genes has been functionally inactivated.