Retinyl methyl ether (RME), which prevents cancers of the rat mammary gland, binds to cellular retinol-binding protein and serum retinol-binding protein but not to cellular retinoic acid-binding protein or to the nuclear retinoid receptors, RARs/RXRs. Since the biochemical effects of retinoids likely involve activation or suppression of RAR/RXR-mediated gene transcription, we evaluated such activity of RME by performing cotransfection assays involving CV-1 cells, expression vectors containing RAR and/or RXR cDNA, and an appropriate reporter vector. In the concentration range of 10(-9)-10(-6)M, RME did not activate transcription by either of the heterodimers (RAR alpha, beta, or gamma/RXR alpha) or the homodimer (RAR alpha/RAR alpha). The retinoid, however, exhibited concentration-dependent inhibitory effects on the basal level of transcriptional activity (no other retinoid added) of both the RAR beta- and RAR gamma/RXR alpha heterodimers and of the retinoic acid-induced transcriptional activation of the RAR gamma/RXR alpha receptors. Thus, RME acted as a retinoic acid antagonist, a role possibly involved in its cancer preventive activity. (C) 1996 Academic Press, Inc.