Exposure of NIH3T3 cells to retinoic acid resulted in a dose-dependent modulation of transformed focus formation after transfection with an activated H-ras oncogene. Inhibition induced by 10-mu-M retinoic acid was maximal at 21.4% of control values. Maximal inhibition of transformation was found after exposure to 10-mu-M retinoic acid between days 0 and 3 of the transfection period. This concentration was also inhibitory for colony formation upon transfection of the non-transforming gene aph, suggesting that retinoic acid acts primarily on the process of transfection to inhibit focus or colony formation. Exposure to retinoic acid during the late period of the transfection protocol (days 14-20) resulted in alterations in focus morphology. A transformed cell line containing H-ras underwent reversion of the transformed phenotype after 4 weeks of treatment with retinoic acid, as determined by alterations in cell morphology and anchorage-independent growth. Phenotypic reversion was not associated with changes in the expression of the exogenous H-ras or endogenous c-myc or c-fos oncogenes.