Retinoids, synthetic and natural analogs of retinoic acid, exhibit potent growth inhibitory and cell differentiation activities that account for their beneficial effects in treating hyperproliferative diseases such as psoriasis, actinic keratosis, and certain neoplasias. Tazarotene is a synthetic retinoid that is used in the clinic for the treatment of psoriasis. To better understand the mechanism of retinoid action in the treatment of hyperproliferative diseases, we used a long-range differential display-PCR to isolate retinoid-responsive genes from primary human keratinocytes. We have identified a cDNA, tazarotene-induced gene 3 (TIG3; Retinoic Acid Receptor Responder 3) showing significant homology to the class II tumor suppressor gene, H-rev 107. Tazarotene treatment increases TIG3 expression in primary human keratinocytes and in vivo in psoriatic lesions. Increased TIG3 expression is correlated with decreased proliferation. TIG3 is expressed in a number of tissues, and expression is reduced in cancer cell lines and some primary tumors. In breast cancer cell lines, retinoid-dependent TIG3 induction is observed in lines that are growth suppressed by retinoids but not in nonresponsive lines. Transient over-expression of TIG3 in T47D or Chinese hamster ovary cells inhibits colony expansion. Finally, studies in 293 cells expressing TIG3 linked to an inducible promoter demonstrated decreased proliferation with increased TIG3 levels. These studies suggest that TIG3 may be a growth regulator that mediates some of the growth suppressive effects of retinoids.