Vascular endothelial growth factor (VEGF) is overexpressed in hyperproliferative diseases, such as psoriasis and cancers, which are characterized by increased angiogenesis. Experimentally, VEGF overexpression can be induced by the treatment of cell cultures and biological tissues with phorbol esters, such as 12-O-tetradecanoylphorbol-13-acetate (TPA). Using normal human keratinocytes in conventional cultures and skin grafted onto nude mice in vivo, we show that retinoids can inhibit TPA-mediated VEGF gene induction at the transcriptional level. Because retinoids are biologically active either by interacting with the nuclear retinoic acid receptors or by interfering with the activator protein 1 (AP1) transcription factor, we studied the effect of the retinoic acid derivative CD 2409, which exhibits strong anti-AP1 activity but does not bind to the known retinoic acid receptors in vitro. The results demonstrate that the inhibition of VEGF expression by retinoids only depends on their anti-AP1 activity and does not require gene transactivation via retinoic acid response elements. Because the VEGF promoter contains four potential AP1 binding sites, we used different promoter constructs to identify the functional site responsible for TPA induction and retinoid inhibition. This site turned out to be localized at position -621 of the 5' flanking region of the VEGF gene.