Deer antlers are the only mammalian organs that can be repeatedly regenerated; each year, these complex structures are shed and then regrow to be used for display and fighting. To date, the molecular mechanisms controlling antler regeneration are not well understood. Vitamin A and its derivatives, retinoic acids, play important roles in embryonic skeletal development. Here, we provide several lines of evidence consistent with retinoids playing a functional role in controlling cellular differentiation during bone formation in the regenerating antler. Three receptors (alpha, beta, gamma) for both the retinoic acid receptor (RAR) and retinoid X receptor (RXR) families show distinct patterns of expression in the growing antler tip, the site of endochondral ossification. RAR alpha and RXR beta are expressed in skin ("velvet") and the underlying perichondrium. In cartilage, which is vascularised, RXR beta is specifically expressed in chondrocytes, which express type II collagen, and RAR alpha in perivascular cells, which also express type I collagen, a marker of the osteoblast phenotype. High-performance liquid chromatography analysis shows significant amounts of Vitamin A (retinol) in antler tissues at all stages of differentiation. The metabolites all-trans-RA and 4-oxo-RA are found in skin, perichondrium, cartilage, bone, and periosteum. The RXR ligand, 9-cis-RA, is found in perichondrium, mineralised cartilage, and bone. To further define sites of RA synthesis in antler, we immunolocalised retinaldehyde dehydrogenase type 2 (RALDH-2), a major retinoic acid-generating enzyme. RALDH-2 is expressed in the skin and perichondrium and in perivascular cells in cartilage, although chondroprogenitors and chondrocytes express very low levels. At sites of bone formation, differentiated osteoblasts which express the bone-specific protein osteocalcin express high levels of RALDH2. The effect of RA on antler cell differentiation was studied in vitro; all-trans-RA inhibits expression of the chondrocyte phenotype, an effect that is blocked by addition of the RAR antagonist Ro41-5253. In monolayer cultures of mesenchymal progenitor cells, all-trans-RA increases the expression of alkaline phosphatase, a marker of the osteoblastic phenotype. In summary, this study has shown that antler tissues contain endogenous retinoids, including 9-cis RA, and the enzyme RALDH2 that generates RA. Sites of RA synthesis in antler correspond closely with the localisation of cells which express receptors for these ligands and which respond to the effects of RA.