Neither retinoic acid receptor-beta (RARbeta) nor insulin-like growth factor-binding protein-3 (IGFBP-3) is expressed in breast cancer cell line MCF-7. The expression of both proteins can be induced in response to all-trans-retinoic acid (atRA). By using an RARalpha-selective antagonist (Ro 41-5253), we demonstrated that RARbeta expression was induced by atRA through an RARalpha-dependent signaling pathway and that RARbeta induction was correlated with IGFBP-3 induction. However, MCF-7 cells transfected with sense RARbeta cDNA expressed IGFBP-3 even in the presence of the RARalpha-selective antagonist Ro 41-5253. On the other hand, antisense RARbeta cDNA transfection of MCF-7 cells blocked atRA-induced IGFBP-3 expression, indicating that RARbeta is directly involved in the mediation of IGFBP-3 induction by atRA. Induction of IGFBP-3 expression by atRA occurs at the transcriptional level, as measured by nuclear run-on assays. Finally, we showed that atRA-induced IGFBP-3 is functionally active in modulating the growth-promoting effect of IGF-I. These experiments indicate that RARalpha and RARbeta, both individually and together, are important in mammary gland homeostasis and breast cancer development. By linking IGFBP-3 to RARbeta, our experiments define the signal intersection between the retinoid and IGF systems in cell growth regulation and explain why loss of RARbeta might be critical in breast cancer carcinogenesis/progression.