We demonstrate that the cells of the sponge Geodia cydonium are equipped with the basic elements required for a retinoic acid (RA)-dependent response pathway; RA was identified and quantitated, the cellular RA-binding protein (CRABP) was detected and the nuclear RA receptor (RAR) was found. In the isolated cell system the level of CRABP, but not of RAR, is strongly induced after incubating the cells for 10h with the homologous aggregation factor. In induced cells incubation with 0.3 microM RA results in a strong down-regulation of the c-myb (or c-myb-related) proto-oncogene (M(r) 63,000; mRNA 3.3 kb). We postulate that this pathway is also functionally active and that RA acts as a natural morphogen.