Evidence indicates that the retinoic acid receptor beta (RARbeta) gene might be a tumor suppressor gene. Previously, we have shown that the expression of the RARbeta gene was either inhibited or downregulated in tumorigenic hepatoma cell lines such as McA-RH8994. McA-RH8994 cells expressed RARalpha and gamma and three types of retinoid X receptor (RXRalpha, beta and gamma), but not RARbeta mRNA. To further analyze the molecular mechanisms which might account for RARbeta gene inactivation, the rat RARbeta gene promoter was cloned from McA-RH8994 cells and no mutation was detected. By transient transfection, McA-RH8994 cells contained the necessary factors to activate the RARbeta gene. To study the possible roles of RARbeta in hepatoma cells, the expression of the RARbeta gene was restored in McA-RH8994 cells by stable transfection. A RARbeta positive cell line named McA-RH8994beta was characterized. The results demonstrated that expression of the RARbeta gene resulted in increased sensitivity of the hepatoma cells to the antiproliferative effect of retinoic acid (RA). Furthermore, expression of RARbeta resulted in a spontaneous differentiation of the hepatoma cells. These data indicate that RARbeta plays important roles in differentiation and antiproliferation.