The effect of all-trans retinoic acid (RA) on cell proliferation and protein synthesis was examined using neonatal human dermal fibroblasts in culture. Incorporation of [3H]-methylthymidine showed that cell proliferation decreased in response to increasing concentrations of RA. Analysis of proteins secreted into culture medium showed a decrease in the synthesis of both collagen and non-collagenous proteins, paralleling the effect on cell proliferation. Secreted proteins showed increased enzymatic processing of type I procollagen. The enhanced appearance of pc collagens, intermediates in the enzymatic conversion of procollagen to collagen, indicated that retinoic acid increased the activity of procollagen aminoterminal protease. Electrophoretic mobility and mannosylation of fibronectin was unchanged at RA concentrations tested. Cell morphology was unchanged at all concentrations of retinoic acid. The inhibitory effect of RA on cell proliferation is consistent with previous observations. The enhanced activity of procollagen aminoterminal protease may be important in the overall influence of RA on the elaboration of connective tissue.