Retinoic acid, a hormone biosynthesized hom retinol, controls numerous biological systems by regulating eukaryotic gene expression hom conception through death. This work reports the cloning and expression of a Liver cDNA encoding a microsomal retinol dehydrogenase (RoDH), which catalyzes the primary and rate-limiting step in retinoic acid synthesis. The predicted amino acid sequence and biochemical data obtained from the recombinant enzyme verify it as a short-chain alcohol dehydrogenase. Like microsomal RoDH, the recombinant enzyme recognized as substrate retinol bound to cellular retinol-binding protein, had higher activity with NADP rather than NAD, was stimulated by ethanol or phosphatidylcholine, was not inhibited by 4-methylpyrazole, was inhibited by phenylarsine oxide and carbenoxolone and localized to microsomes. RoDH recognized the physiological form of retinol, holocellular retinol-binding protein, with a K-m of 0.9 mu M, a value lower than the similar to 5 mu M concentration of holocellular retinol binding protein in liver. Northern and Western blot analyses revealed RoDH expression only in rat Liver, despite enzymatic activity in liver, brain, kidney, lung, and testes. These data suggest that tissue specific isozyme(s) of short chain alcohol dehydrogenases catalyze the first step in retinoic acid biogenesis and further strengthen the evidence that the ''cassette'' of retinol bound to cellular retinol-binding protein serves as a physiological substrate.