The effect of retinyl acetate (RAC) on the activity of cAMP-dependent protein kinase (PKA) was studied in mouse 10T1/2 cells. The studies revealed that normal 10T1/2 cells had about 13-fold more PKA activity than did methylcholanthrene-transformed cells (MCA cells). The addition of RAC to MCA cells increased the activity of PKA about 3-fold as measured by the in vitro phosphorylation of a specific site in H1 histone (site A) or Kemptide. The increased PKA activity coincided with a reduction in the rate of cell replication of MCA cells, about 24 hr after exposure to the retinoid. Addition of forskolin to RAC-treated MCA cells resulted in a further reduction in the rate of cell replication, and this suggested that the enhanced PKA activity was also capable of action in vivo. To test this notion, MCA cells were grown with and without RAC, and the phosphorylation of the H1 histone at site A, a site known to be phosphorylated by PKA in cells treated with hormones or other agonists which activate PKA, was studied in vivo. RAC, by itself, was capable of causing an increase in the phosphorylation of the H1 histone at site A, demonstrating that the retinoid-mediated increase in PKA activity was sufficient to cause the enhanced phosphorylation of a known substrate.