In the developing mouse, retinoic acid receptors (RARs) beta and gamma 1 are expressed in characteristic spatiotemporal patterns which are correlated with different developmental fates of the respective tissues. Understanding the cues that regulate the expression of the various RARs may therefore provide insights into the process of tissue diversification. Transcription of RAR beta is rapidly upregulated through a retinoic acid-responsive element (here referred to as the beta RARE) in its promoter. Like RAR alpha and RAR beta, RAR gamma 1 has been implicated in the activation of the beta RARE. Therefore, it is puzzling that RAR beta and RAR gamma 1 appear to be expressed in reciprocal patterns. In the present report, we show that RAR gamma 1, one of the two predominant RAR gamma isoforms, can inhibit the activity of RAR gamma 2, RAR beta, and endogenous RAR on the beta RARE. In contrast, the three RAR gamma isoforms tested and RAR beta activated a palindromic thyroid hormone response element with similar levels of efficiency. The differential activity of RAR gamma 1 compared with that of RAR beta appears to reside in both the N-terminal and the C-terminal halves of RAR gamma 1. RAR gamma 1-mediated inhibition of other RARs may involve competition for the response element as well as direct interaction with other receptors and might be part of a regulatory system contributing to the characteristic tissue distribution of the various RARs.