Retinoids are vitamin A (retinol) derivatives essential for normal embryo development and epithelial differentiation. These compounds are also involved in chemoprevention and differentiation therapy of some cancers, with particularly impressive results in the management of acute promyelocytic leukemia (APL). Although highly effective in APL therapy, resistance to retinoic acid (RA) develops rapidly. The causes of this resistance are not completely understood and the following factors have been involved: increased metabolism, increased expression of RA binding proteins, P-glycoprotein expression, and mutations in the ligand binding domain of RARα. RA exerts its molecular actions mainly through RAR and RXR nuclear receptors. In addition to the nuclear receptor based mechanism of RA action, covalent binding of RA to cell macromolecules has been reported. RA derives from retinol by oxidation through retinol and retinal dehydrogenases, and several cytochrome P450s (CYPs). RA is thereafter oxidized to several metabolites by a panel of CYPs that differs for the different RA isomers. Phase II metabolism, mainly glucuronidation, is also observed. The role RA metabolism plays in the expression of its biological actions is not completely understood: in several systems, metabolism decreases RA activity, whereas in other systems metabolism appears involved in its action. In addition, several RA metabolites have shown activity and cannot be classified as only catabolites. Therapy of cancer with retinoids is still in its infancy, but the use of new analogues with improved pharmacological properties, along with combination with other drugs, could undoubtedly improve the management of several cancers in the future.