In rheumatoid arthritis synovial tissue proliferates and destroys articular cartilage, bone and tendons. Collagenase is a major mediator of the connective tissue degradation. This enzyme is produced in large quantities by rheumatoid tissue and its synthesis can be inhibited by retinoids. However, knowledge of mechanisms controlling retinoid inhibition of collagenase production and of factors possibly controlling synovial cell proliferation is limited. We found that transforming growth factor beta in combination with epidermal growth factor, epidermal growth factor alone and immune interferon increased proliferation of cultured human and rabbit synovial fibroblasts. Only transforming growth factor beta caused a piling up of cells into foci resembling those seen in primary cultures of human rheumatoid tissue. All the factors were antagonized by retinoids but not by glucocorticoids or indomethacin. Adding retinoids or glucocorticoids to collagenase-producing cells decreased hybridizable collagenase mRNA by 50% within 24 h. Oral administration of retinoids to rats with experimental arthritis decreased clinical disease without toxicity, and inhibited collagenase synthesis by synovial cells taken from treated animals. Retinoids are both antiproliferative and anti-invasive, and therefore may be potential therapeutic agents in the treatment of rheumatoid arthritis.