That both deficiency and excess of vitamin A lead to a wide spectrum of congenital abnormalities has strongly implicated the active metabolite, retinoic acid (RA), in normal embryonic development. There are 3 families of RA receptors (RARs), RARα, RARβ and RARγ, each having at least two isoforms derived from primary transcripts initiated at two promoters P1 and P2 (reviewed in Leid et al., 1992) Transcripts encoding all 4 isoforms of RARβ (RARβ1 to RARβ4) accumulate in embryonal carcinoma (EC) cells in the presence of RA. It has been previously shown that the RA modulation of RARβ2/β4 transcripts is achieved at the level of transcriptional initiation via a RA response element (RARE) present in the P2 RARβ2/β4 promoter. In contrast, the mechanism by which RA up-regulates RARβ1/β3 transcripts has not yet been elucidated. We describe here the isolation of the P1 RARβ1/β3 promoter and characterization of its activity in transgenic animals. We find that RARβ1/β3 promoter activity, which is apparently confined to the embryonic CNS, is not modified by RA treatment, unlike that of the RARβ2/β4 promoter (Mendelsohn et al., 1991). Nuclear run-on transcription analysis in EC cells supports the conclusion that RARβ1/β3 transcript initiation is not modulated by RA, and that the RA-induced accumulation of RARβ1/β3 transcripts occur via a RA-dependent release of a block in RNA chain elongation.