Retinoic acid (RA)-elicited signaling has been shown to play critical roles in development, organogenesis, and the immune response. RA regulates expression of Alzheimer's disease (AD)-related genes and attenuates amyloid pathology in a transgenic mouse model. In this study, we investigated whether RA can suppress the production of amyloid-β (Aβ) through direct inhibition of γ-secretase activity. We report that RA treatment of cells results in significant inhibition of γ-secretase-mediated processing of the amyloid precursor protein C-terminal fragment APP-C99, compared with DMSO-treated controls. RA-elicited signaling was found to significantly increase accumulation of APP-C99 and decrease production of secreted Aβ40. In addition, RA-induced inhibition of γ-secretase activity was found to be mediated through significant activation of extracellular signal-regulated kinases (ERK1/2). Treatment of cells with the specific ERK inhibitor PD98059 completely abolished RA-mediated inhibition of γ-secretase. Consistent with these findings, RA was observed to inhibit secretase-mediated proteolysis of full-length APP. Finally, we have established that RA inhibits γ-secretase through nuclear retinoic acid receptor-α (RARα) and retinoid X receptor-α (RXRα). Our findings provide a new mechanistic explanation for the neuroprotective role of RA in AD pathology and add to the previous data showing the importance of RA signaling as a target for AD therapy.