The production of interferon was used to study the site and mechanism of action of retinoic acid (vitamin A). The data are consistent with a site of action at the gene level, because it appears that interferon production is blocked at the transcriptional step by a retinoic acid-induced protein. (i) The effect of retinoic acid is probably on an early cellular function associated with interferon production rather than an effect on the inducer [virus or poly(I).poly(C)]. (ii) The suppression of interferon production by retinoic acid is blocked by cycloheximide, indicating that a newly synthesized protein (repressor) mediates the suppression. (iii) When allowances are made for the time required for the synthesis of the retinoic acid-induced protein, the time course of retinoic acid suppression of interferon production is superimposable on the time course of actinomycin D suppression because the slopes are parallel. These data provide evidence for transcriptional control of a specific protein (interferon) by retinoic acid. Additionally, they support the existence of transcriptional control of interferon production after addition of inducer.