We have recently characterized a cytosolic aldehyde dehydrogenase from rat kidney that functions as a retinal dehydrogenase (RALDH) and have cloned the corresponding gene. RALDH catalyzes the oxidation of retinal to retinoic acid, which regulates cell growth and differentiation by activating retinoic acid receptors. In situ hybridization demonstrates that RALDH mRNA expression is prominent in kidney in 2-day-old rats, is detected in lung and in epithelia of several tissues, but is not found in liver tissue. Retinal dehydrogenase activity peaks in kidney at Day 2 after birth and decreases gradually until adulthood, correlating well with RALDH expression. Weaker activity is also detectable in lungs but not in liver. Notably, distribution patterns of RALDH in kidney tissues are dramatically altered during postnatal development (P). From P0 to P6, hybridization is essentially concentrated within the marginal nephrogenic zone of the cortex. Expression progresses to deeper cortical layers from P12 to P16 and is intense in the medulla at P42, and focal expression is still detectable in the cortex. Immunocytochemical localization of RALDH in neonatal kidney shows staining mostly in cortical zone convoluted tubules and in adult rat shows staining in segments of distal and proximal tubules. These data suggest an important role for RALDH in modulating retinoic acid levels in different cell types during rat kidney development. The changing patterns of RALDH expression mirror stages of nephron formation in the developing rat kidney, strongly suggesting a central role for RALDH and thus for retinoids in controlling kidney development.