Retinoids have been shown to influence pattern formation during development and regeneration in numerous systems such as limbs, vertebrae, and neural tube although there is little information about the effects of retinoids on pattern formation in visceral organs. We investigated the effects of exogenous retinoic acid on the in vitro pattern of airway branching and on lung epithelial cell differentiation. Histology, [3H]thymidine autoradiographies and reverse transcriptase/polymerase chain reaction (RT/PCR) amplification were used to assess the effects of retinoids and the expression of lung epithelial markers of differentiation. We found that retinoic acid interferes, in a dose-dependent fashion, with the expression of epithelial genes that are found in distal segments of the fetal lung (surfactant-associated proteins SP-A, SP-B, and SP-C). At high concentrations, retinoic acid (RA) dramatically altered the developmental pattern of the lung, favoring growth of structures that resemble proximal airways and concomitantly suppressing distal epithelial buds. We hypothesize that this in vitro "proximalizing" effect on the developing lung may be related to alterations in the expression of pattern-related genes.