In this study we demonstrate that retinoic acid (RA) increases the expression of transcription factor zif268 mRNA in primary cultures of fetal rat calvarial cells and in simian virus 40-immortalized clonal rat calvarial preosteoblastic cells (RCT-1), which differentiate in response to RA, but not in the more differentiated RCT-3 and ROS 17/2.8 cells. The increased expression of zif268 mRNA is rapid (maximal within 1 h), transient (returns to basal levels by 3 h), detectable at RA doses of 10-12 M, and independent of protein synthesis. The relative stimulation of zif268 mRNA by RA was much larger than that of other early genes, including c-fos, c-jun, and junB. The rate of transcription of RA-stimulated RCT-1 cells, estimated by nuclear run-on assays, was elevated, suggesting that RA regulation of zif268 gene transcription was at least in part transcriptional. Moreover, RA stimulated the transcriptional activity of a Zif268CAT (chloramphenicol acetyltransferase) plasmid containing 632 bp of zif268 5′ regulatory sequences in RCT-1 cells but not in the more differentiated RCT-3 cells. These in vitro data support the in vivo observations which localize zif268 and RA receptor-γ transcripts to bone and cartilage during development, suggesting that both RA and zif268 may play a role in osteoblast differentiation.