The anticancer effects of retinoids are mainly mediated by two classes of nuclear receptors, the retinoic acid receptors (RARs) and retinoid X receptors (RXRs), which are encoded by three distinct genes (alpha, beta, and gamma). Recent studies have demonstrated that RARbeta plays a critical role in mediating anticancer effects of retinoids. However, how RARbeta exerts its potent anticancer effects remains largely unknown. In this study, we investigated anti-Activator Protein-1 (AP-1) activity of RARbeta. In a transient transfection assay, all three RAR subtypes, RARalpha, RARbeta, and RARgamma, could effectively inhibit phorbol ester 12-O-tetradecanoylphorbol-13-acetate-induced AP-1 activity and the activity of oncogenes c-Jun and c-Fos on AP-1 containing reporter genes in the presence of retinoic acid (RA). However, RARbeta showed a strong RA-independent inhibition of AP-1 activity, whereas inhibition of AP-1 activity by RARalpha and RARgamma was RA dependent. By using several hybrid receptors that contain either the COOH-terminal portion or the NH2-terminal portion of RARbeta, we demonstrated that the NH2-terminal portion of RARbeta, the A/B domain, was mainly responsible for the RA-independent inhibition of AP-1 activity. This activity was not attributable to constitutive AF-1 activity of RARbeta, because it did not activate several RA response element-containing reporter genes. In addition, inhibition of histone deacetylase activity by trichostatin A did not overcome the inhibitory effect of RARbeta. In cancer cells, stable transfection of RARbeta exhibited strong inhibition of AP-1 activity, even in the absence of RA. Moreover, expression of endogenous AP-1-responsive gene collagenase I was strongly repressed in cancer cells stably transfected with RARbeta. In studying the antitransforming activity of RARbeta, we observed that the growth of breast cancer MDA-MB231 cells in soft agar was significantly repressed in a RA-independent manner when cells were stably transfected with RARbeta but not RARalpha. Together, our results demonstrate that RARbeta may exert its potent anticancer effect in part through its unique anti-AP-1 activity.