We report on the isolation of a cytochrome P450 (CYP)-like retinoic acid (RA) 4-hydroxylase cDNA from T-47D human breast cancer cells that is identical to the recently cloned hCYP26, which is involved in the metabolic breakdown of RA. Northern analysis showed that this novel human CYP26 is induced within 1 h upon RA treatment in RA-sensitive T-47D breast carcinoma cells but not in RA-resistant MDA-MB-231 breast cancer cells and HCT 116 colon cancer cells. Stable introduction of different RA receptor (RAR) subtypes in HCT 116 cells showed that CYP26 expression is dependent on RARalpha and RARgamma and, to a lesser extent, on RARbeta and closely paralleled RA metabolism, suggesting that it represents the major RA 4-hydroxylase in these human cells. Furthermore, stable introduction of all three RAR subtypes in HCT 116 cells resulted in restored RA sensitivity as assayed by growth inhibition. Interestingly, CYP26 activity was efficiently inhibited by liarozole, an inhibitor of RA metabolism, leading to enhanced growth inhibition by RA. The RA-induced CYP26 was shown to be highly specific for the hydroxylation of all-trans-RA and did not recognize the 13-cis and 9-cis isomers. This substrate specificity is promising for finding retinoids that are not recognized by this enzyme and, therefore, could be more effective in growth inhibition of susceptible cancer cells.