The focus of the research in the Cell Biology Section is to understand the molecular mechanisms that regulate the differentiation of tracheobronchial and epidermal keratinocytes and in particular the role that retinoids play in this process. Squamous cell differentiation is a multi-stage process. In the first stage, cells undergo irreversible growth arrest. This growth arrest is a requirement for the expression of the squamous cell phenotype (stage 2). A characteristic feature of squamous differentiation is the formation of the cross-linked envelope, a layer of cross-linked protein formed beneath the plasma membrane. Two genes, transglutaminase type I and cornifin, whose products play an important role in the formation of this envelope have been cloned. Cornifin is a new cross-linked envelope protein that is high in glutamine and proline. Cornifin becomes cross-linked into high molecular complexes by transglutaminase. The transglutaminase gene has been cloned and sequenced. Several regions that regulate the transcription of this gene have been identified in its promoter. The expression of squamous cell-specific genes is suppressed by retinoids. This regulation appears to occur at the transcriptional level and be mediated by nuclear retinoic acid receptors. Epidermal keratinocytes express the nuclear retinoic acid receptors RARalpha, RARgamma, and RXRalpha. Alterations in the expression of these genes may play a role in the process of carcinogenesis. Many squamous cell carcinomas of the lung appear to be defective in the induction of RARbeta by retinoic acid. Another example is promyelocytic leukemia where a translocation involving the transcriptional factor PML and RARalpha plays a role in the induction of the malignant phenotype. Our laboratory has shown that the PML/RARalpha fusionprotein has a similar affinity for retinoids as RARalpha and that it, like RARalpha, is largely localized in the nucleus. The PML/RARalpha fusionprotein forms high molecular weight complexes with either itself or other nuclear proteins. The latter may be important to leukemogenesis.