Retinoids mediate a number of physiological pathways through their effects on cellular growth and differentiation. Upon binding to retinoic acid receptors (RARs) and retinoid X receptors (RXRs), retinoids regulate cellular processes by directly modulating the expression of responsive genes. The wide-ranging effects of retinoid action are attributable to two main factors-the ubiquitous distribution of several subtypes and isoforms of RARs and RXRs, and the ability of these receptors to regulate numerous genes upon ligand activation. The broad range of effects mediated by retinoids means not only that they have many potential therapeutic applications but also that non-selective retinoids are associated with a high incidence of adverse effects. The design of retinoids that are receptor-selective and function-selective is a strategy that is proving successful in developing novel retinoids that offer not only good efficacy but also good tolerability. Tazarotene, a receptor-selective retinoid indicated for the topical treatment of psoriasis, is at the forefront of this new generation of retinoids. In the near future, other receptor-selective retinoids may prove useful for the treatment of other dermatological diseases, cancer, and diabetes.