Interactions between all-trans-retinoic acid (RA) and bone morphogenetic proteins (BMPs) affect the expression of neurotrophin receptors in sympathetic neurons (Kobayashi et al., 1998). In this study, we examined the possibility that similar interactions might regulate the morphological development of these neurons. Under control conditions, embryonic rat sympathetic neurons formed axons but not dendrites; cells exposed to RA had a similar appearance. Profuse dendritic growth was observed upon exposure to BMP-7, and this was reduced by approximately 70% by RA. This inhibitory effect of RA was mediated primarily by retinoic acid receptors (RARs) and it exhibited substantial specificity because it was not associated with changes in either axonal elongation or cell survival. Moreover, mRNAs for enzymes required for synthesis of RA were expressed in the sympathetic neurons and retinoid activity was released from superior cervical ganglia. These observations suggest that retinoids may function as endogenous morphogens and regulate neural cell shape and polarity in developing sympathetic ganglia.