Vitamin A (retinol) and its active derivatives (the retinoids) are essential for growth and development of the mammalian fetus. Maternally-derived retinol has to pass through the placenta to reach the developing fetus. Despite its apparent importance, little is known about placental metabolism of retinol, and particularly placental production and/or secretion of active retinoids. It has been previously considered that retinoids are recruited from the uterine environment to influence placental development and function during gestation. We have studied retinoid metabolism in the human choriocarcinoma cell line JEG-3 and demonstrate, for the first time, that active retinoids are produced endogenously by the JEG-3 cell line from retinol. These retinoids induce gene expression from a retinoic acid-responsive enhancer element reporter plasmid and modulate placental transglutaminase activity. Furthermore, retinoids are secreted from JEG-3, as shown by the activation of retinoic acid-responsive beta lacZ reporter cells grown in conditioned media. These results suggest that there could be an active role for trophoblast-derived retinoids during human development.