We present evidence that retinoic acid can down-regulate transcriptional activation by the nuclear protooncogene c-jun. All three members of the retinoic acid receptor (RAR) subfamily (RAR alpha, RAR beta, and RAR gamma) can repress transcriptional induction of the human collagenase gene or a heterologous promoter that contains the collagenase promoter AP-1-binding site. In contrast, the retinoid X receptor fails to repress Jun/AP-1 activity, demonstrating a significant difference between the two regulatory systems through which retinoids exert their transcriptional control. Analysis of RAR alpha mutants in transfection studies reveals that the DNA-binding domain is important for the inhibition of Jun/AP-1 activity, even though the RAR does not bind the collagenase AP-1 site. Rather, gel-retardation assays reveal that bacterially expressed full-length RAR alpha inhibits binding of Jun protein to target DNA. These data suggest that the RAR alpha may form a nonproductive complex with c-Jun and provides a simple mechanisms by which retinoic acid may limit cell growth and possibly malignant progression.