To investigate the roles of retinoic acid (RA) receptors (RARs) in the physiology of epidermis that does not express RARbeta, conditional spatio-temporally controlled somatic mutagenesis was used to selectively ablate RARalpha in keratinocytes of RARgamma-null mice. Keratinocyte proliferation was maintained in adult mouse epidermis lacking both RARalpha and RARgamma, as well as in RARbeta-null mice. All RAR-mediated signalling pathways are therefore dispensable in epidermis for homeostatic keratinocyte renewal. However, topical treatment of mouse skin with selective retinoids indicated that RXR/RARgamma heterodimers, in which RXR transcriptional activity was subordinated to that of its RARgamma partner, were required for retinoid-induced epidermal hyperplasia, whereas RXR homodimers and RXR/RARalpha heterodimers were not involved. RA-induced keratinocyte proliferation was studied in mutant mice in which RXRalpha, RXRalpha and RARalpha, RARgamma, or RXRalpha and RARgamma genes were specifically disrupted in either basal or suprabasal keratinocytes. We demonstrate that the topical retinoid signal is transduced by RXRalpha/RARgamma heterodimers in suprabasal keratinocytes, which, in turn, stimulate proliferation of basal keratinocytes via a paracrine signal that may be heparin-binding EGF-like growth factor.