Retinoic acid (RA) induces cell cycle arrest of hormone-dependent human breast cancer (HBC) cells. Previously, we demonstrated that RA-induced growth arrest of T-47D HBC cells required the activity of the RA-induced protein kinase, protein kinase Calpha (PKCalpha) [J. Cell Physiol. 172 (1997) 306]. Here, we demonstrate that RA treatment of T-47D cells interfered with growth factor signaling to downstream, cytoplasmic and nuclear targets. RA treatment did not inhibit epidermal growth factor (EGF) receptor activation but resulted in rapid inactivation. The lack of sustained EGFR activation was associated with transient rather than sustained association of the EGFR with the Shc adaptor proteins and activation of Erk 1/2 and with compromised induction of expression of immediate early response genes. Inhibiting the activity of PKCalpha, a retinoic acid-induced target gene, prevented the effects of RA on cell proliferation and EGF signaling. Constitutive expression of PKCalpha, in the absence of RA, decreased cell proliferation and decreased EGF signaling. RA treatment increased steady-state levels of the protein tyrosine phosphatase PTP-1C and all measured effects of RA on EGF receptor function were reversed by the tyrosine phosphate inhibitor orthovanadate. These results indicate that RA-induced target genes, particularly PKCalpha, prevent sustained growth factor signaling, uncoupling activated receptor tyrosine kinases and nuclear targets that are required for cell cycle progression.