Endogenous retinoic acid (RA) has been observed in vertebrate embryos as early as gastrulation, but the mechanism controlling spatiotemporal synthesis of this important regulatory molecule remains unknown. Some members of the alcohol dehydrogenase (ADH) family catalyze retinol oxidation, the rate-limiting step in RA synthesis. Here we have examined mouse embryos for the presence of endogenous RA and expression of ADH genes. RA was not detected in egg cylinder stage embryos but was detected in late primitive streak stage embryos. Detection of class IV ADH mRNA, but not class I or class III, coincided with the onset of RA synthesis, being absent in egg cylinder embryos but present in the posterior mesoderm of late primitive streak embryos. During neurulation, RA and class IV ADH mRNA were colocalized in the craniofacial region, trunk, and forelimb bud. Class IV ADH mRNA was detected in cranial neural crest cells and craniofacial mesenchyme as well as trunk and forelimb bud mesenchyme. The spatiotemporal expression pattern and enzymatic properties of class IV ADH are thus consistent with a crucial function in RA synthesis during embryogenesis. In addition, the finding of endogenous RA and class IV ADH mRNA in the craniofacial region has implications for the mechanism of fetal alcohol syndrome.