The influence of retinoic acid on matrix-induced endochondral bone differentiation was determined. Retinoic acid was administered during discrete stages of endochondral bone formation, specifically, mesenchymal cell proliferation, chondrogenesis, bone formation, and mineralization. In retinoic acid-treated rats examined on day 3 following matrix implantation, biochemical markers for mesenchymal cell proliferation were about 50% of the controls. Chondrogenesis on day 7, assessed by 35 SO4 incorporation into proteoglycans, was 27% of the control. In addition, dissociative extraction of proteoglycans with 4.0 M guanidine-HCl and chromatography on Sepharose CL-2B revealed the synthesis of a smaller molecular weight proteoglycan when compared to controls which exhibited the cartilage-specific type. Osteogenesis and bone mineralization were monitored by alkaline phosphatase activity and 45Ca incorporation. On day 11 alkaline phosphatase activity was decreased by 40% and 45Ca incorporation was 48% of the control. These results revealed the multiple foci of the actions of excess vitamin A.