Retinoic acid (RA) modulates cell proliferation, differentiation, and apoptosis, and is used in chemotherapy and chemoprevention in several human cancers. RA exerts its pleiotropic activities by activating the nuclear receptors, retinoic acid receptor (RAR), which, in turn, regulate transcription of multiple target genes. In cells, RA also associates with cellular RA-binding proteins [cellular RA binding proteins (CRABPs)-I and -II]. Recent studies revealed that CRABP-II functions by "channeling" RA to RAR, thereby enhancing the transcriptional activity of the receptor. In search for a biologically meaningful role for CRABP-II, we examined its effect on RA-induced growth inhibition in RA-resistant tumors. Stable expression of CRABP-II in mammary carcinoma SC115 cells enabled activation of RAR, considerably sensitized the cells to RA-induced growth inhibition, and dramatically suppressed their tumorigenicity in immunodeficient mice. Similarly, injection of an adenovirus expressing CRABP-II into mammary carcinomas that spontaneously develop in TgN(MMTVneu)202Mul mice resulted in a significant delay in tumor growth and in prolonged survival rates. Remarkably, in both mouse models, administration of exogenous RA had no additional beneficial effect, indicating that endogenous levels of RA are sufficient for maximal tumor suppression on CRABP-II overexpression. The observations reveal that CRABP-II plays a critical role in sensitizing tumors to the growth-suppressive activities of RA in vivo.