Retinoic acid stimulates several murine embryonal carcinoma (EC) cell lines, even those previously considered to be incapable of differentiating, to give rise to cell types distinguishable from the parental phenotype in morphology, production of plasminogen activator and surface protein properties. Retinoic acid promotes these changes over a range of low concentrations (10-9-10-5 M) which are generally non-toxic to the cells. The effects are clearly demonstrated when EC cells are aggregated prior to exposure to retinoic acid. It is concluded that the observed phenotypic alterations induced by retinoic acid reflect differentiation of the EC cells since non-EC cell characteristics are maintained by cloned cells several generations after retinoic acid is removed from the cultures. Our studies suggest that although retinoic acid stimulates the conversion of EC cells to differentiated derivatives, it does not influence the direction of differentiation. Furthermore, the effectiveness of retinoic acid in stimulating differentiation of EC cells from lines such as Nulli-SCC1 raises the question of whether true 'nullipotent' EC lines really exist. © 1979.