Human lung cancer cells, including small cell lung carcinoma (SCLC), frequently lose expression of retinoic acid receptor beta (RAR-beta) and are resistant to the growth inhibitory activity of all-trans retinoic acid (RA). To elucidate the role of RAR-beta in the growth regulation of SCLC by retinoids, we restored RAR-beta expression in RAR-beta-negative H209 SCLC cells by retroviral transduction (H209-RAR-beta). We found that H209-RAR-beta, but not parental H209 cells, underwent growth inhibition upon RA treatment. RA-treated H209-RAR-beta cells arrested in G1 and displayed reduced L-myc expression and cyclin-dependent kinase 2 (cdk2) activity compared with untreated cells. RA treatment of H209-RAR-beta cells was also accompanied by increased expression of the cdk inhibitor p27Kip1, whereas no differences in the expression of L-myc or p27Kip1 were detected upon RA treatment of parental H209 cells. The RA-induced growth arrest of H82 SCLC cells, which express endogenous RAR-beta, was also associated with reduced c-myc and increased p27Kip1 expression. We found that ectopic expression of p27Kip1 induced growth inhibition in both H209 and H82 cells, and that sustained myc expression in H209-RAR-beta cells promoted the induction of apoptosis upon RA addition. Our observations indicate that RAR-beta gene transfer can restore RA sensitivity in SCLC cells and suggest that myc and p27Kip1 may represent critical mediators of the RA-induced cell cycle arrest in SCLC cells expressing RAR-beta.