Retinoic acid receptor beta (RAR beta), which codes for a nuclear receptor for retinoic acid, is localized in a chromosomal region frequently deleted in lung cancer cells. The gene is expressed in normal lung tissue and in the majority of the cell lines derived from lung tumors but not in most of the lines derived from lung tumors with epidermoid characteristics. To study the possible role of RAR beta in growth control of epidermoid lung tumor-derived cells, transfectants expresing RAR beta were generated from nonexpressing epidermoid tumor-derived cell lines. Four clones were derived from line CALU-1, three of which showed a 20-60% increase in doubling time in the presence of retinoic acid. Parental and control-transfected cells were unaffected or slightly stimulated. All four clones expressing RAR beta were less tumorigenic in nude mice than were the untransfected or control-transfected cells, with about a 50% incidence of take vs. 95%. When tumors did develop from RAR beta-positive cells, they showed a reduced rate of growth, an increased latency, and, in six of seven tumors tested, a much reduced level of RAR beta expression. Transfectants derived from a second tumor line, H157, also showed a markedly reduced incidence of take in nude mice. Together with the known effects of retinoic acid on differentiation and carcinogenesis, our results support the hypothesis that RAR beta functions as a tumor suppressor gene in epidermoid lung tumorigenesis.