Retinyl methyl ether (RME) is known to prevent the development of mammary cancer. However, the mechanism by which RME exerts its anticancer effect is presently unclear. The diverse biological functions of retinoids, the vitamin A derivatives, are mainly mediated by their nuclear receptors, retinoic acid receptors (RARs) and retinoid X receptors (RXRs). RARs and RXRs are ligand-dependent transcriptional factors that either activate gene transcription through their binding to retinoic acid response elements or repress transactivation of genes containing the activator protein 1 (AP-1) binding site. Previous studies demonstrated that RME can modulate transcriptional activity of retinoid receptors on retinoic acid response elements, suggesting that regulation of retinoid receptor activity may mediate the anticancer effect of RME. In this study, we present evidence that RME can down-regulate AP-1 activity induced by the tumor promoter 12-O-tetradecanoylphorbol-13-acetate, insulin, growth factors, and the nuclear proto-oncogenes c-Jun and c-Fos. Transient transfection assays demonstrate that inhibition of AP-1 activity occurs on the human collagenase promoter containing an AP-1 binding site or the thymidine kinase promoter linked with an AP-1 binding site. In HeLa cells, the inhibition is observed when RAR-alpha and/or RXR-alpha but not RAR-beta or RAR-gamma expression vectors are cotransfected, whereas the endogenous retinoid receptors in breast cancer cells T-47D and ZR-75-1 were sufficient to confer the inhibition by RME. Furthermore, using gel retardation assay, we show that 12-O-tetradecanoylphorbol-13-acetate- and epidermal growth factor-induced AP-1 binding activity in breast cancer cells is inhibited by RME. These results suggest that one of the mechanisms by which RME prevents cancer development may be due to the repression of AP-1-responsive genes.