Retinoic acid induces the differentiation of PCC4.aza 1R and Nulli-SCC1 embryonal carcinoma (EC) cells. In response to retinoic acid treatment, the levels of cyclic AMP (CAMP)-dependent protein kinases are enhanced in t h e plasma membrane within 17 hours and in the cytosol fractions of these cells within 2 to 3 days, as determined by phosphotransferase activity and by 8azido-cyclic [32P]AMP binding to the RI and RII regulatory subunits. PCC4 (RA)-I and Nulli (RA)-l are mutant EC lines that fail to differentiate in response to retinoic acid. The former line, but not the latter, lacks cellular retinoic acid-binding protein (cRABP). Basal levels of CAMP-dependent protein kinase activities are elevated in PCC4 (RA)-l cells. When these cells are treated with retinoic acid, neither CAMP-dependent protein kinase activities nor cAMP binding activities are enhanced; rather, there is a decrease in cytosolic kinase activity and RI subunit. On the other hand, Nulli (RA)-1 cells exhibit increases both in CAMP-dependent protein kinase activities and cAMP binding in response to retinoic acid. These results raise the possibility that cRABP mediates the enhancement of regulatory and catalytic subunits of CAMP-dependent protein kinases in both the membrane and the cytosolic fractions of t h e teratocarcinoma cells. There also might be some effects of retinoic acid on the CAMP-dependent protein kinase that are unrelated to differentiation and to the presence of cRABP.