Reduced retinyl ester synthesis has been associated with several forms of cancer; we therefore proposed studying melanoma development from the perspective of this biochemical pathway. Cultures of human melanoma cells with fibroblastoid morphology showed negligible retinyl ester synthesis; in sharp contrast, those with epithelioid morphology were capable of retinol esterification. Further, isolated proliferating epidermal melanocytes (HFSC/2) esterified retinol, whereas proliferating normal skin fibroblasts (F:CCD-1121.Sk) did not. A primary site cutaneous melanoma and its metastatic match (both of epithelioid morphology) were capable of retinol esterification, while a matched fibroblastoid tumor pair did not synthesize retinyl esters; nevertheless, LRAT (lecithin:retinol acyltransferase) protein was found in microsomal fractions from all four tumors. A mutation screen in the LRAT coding region and adjacent intronic sequences revealed several novel mutations in these melanomas as well as in HFSC/2 and F:CCD-1121.Sk cells: a single nucleotide polymorphism in exon 1(37A-->G), a silent mutation in exon 2a (188 A-->G/186 G-->A), and an insertion in the 5'UTR (9-10insC). CRBP-1 basal expression was present in the HFSC/2, and in both sets of matched tumor pairs; however, steady-state levels in the fibroblastoid melanoma pair were one-third that found in the epithelioid matched tumor pair. Co-culture of human primary site epithelioid melanoma with proliferating normal human skin fibroblasts abrogated retinol esterification within 96 h and increased the expression of the active form of TGFbeta-1 by 2.4-fold. A concomitant 3.2-fold downregulation of CRBP-1 expression took place. This is the first study to (1) demonstrate an association between retinyl ester synthesis and cutaneous melanoma morphological phenotypes; (2) suggest the existence of a soluble, diffusible inhibitor of the retinol esterification pathway; (3) report the ability of the isolated, proliferating human epidermal melanocyte to esterify retinol; and (4) provide evidence of DNA variants in the coding region of LRAT.