Hepatic cytosol from normal deermice having cytosolic alcohol dehydrogenase (ADH+) also displays retinol dehydrogenase activity and converts retinol to retinoic acid, whereas cytosol from ADH- deermice lacks these enzyme activities and does not produce retinoic acid. Furthermore, microsomes from either strain do not convert retinol to retinoic acid. However, when cytosol from ADH- animals is added to the microsomes, retinoic acid is produced. The obligatory role of retinal as an intermediary step in retinoic acid formation is further shown by isotopic dilution of retinoic acid formed from labeled retinol upon addition of unlabeled retinal. Microsomal retinol dehydrogenase also catalyzes the reduction of retinal to retinol, thereby explaining the decrease in retinoic acid production from retinol in liver cytosol of ADH+ deermice when microsomes are added. Thus, the results of this study indicate that retinal is an obligatory intermediate in the hepatic production of retinoic acid from retinol and that cytosolic and microsomal retinol dehydrogenases play a key role in this process.